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Zimbabwe's Central Bank Raids Private Accounts

RENEE MONTAGNE, host:

Moving to Africa, there are signs that political tensions in Zimbabwe are easing now that the country's power-sharing government is getting underway. And there are other signs that the economy is doing badly. NPR's Ofeibea Quist-Arcton reports.

OFEIBEA QUIST-ARCTON: After years criticizing veteran Zimbabwean President Robert Mugabe, the United States has commended the new unity government he set up with his political rival, Prime Minister Morgan Tsvangirai.

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Secretary of State Hillary Clinton has hailed progress in implementing reforms, though she said more work must be done. But the problems Zimbabwe faces were underlined by the admissions yesterday from President Mugabe's Central Bank Governor Gideon Gono, who has been criticized for policies fueling hyperinflation.

He admitted raiding hard currency accounts belonging to private businesses and aid originations without permission to keep cash-starved government ministries operating.

Gono said those accounts would be reimbursed by the ministries and defended his actions by arguing that the Central Bank sustains Zimbabwe in its hour of need.

Now, with a U.S. dollarized economy and Zimbabwe's own currency suspended, Gono appears to be fighting to hold onto his job. He said in a statement that it was time to let bygones be bygones, now that the new coalition government was in place.

Ofeibea Quist-Arcton, NPR News, Johannesburg. Transcript provided by NPR, Copyright NPR.

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