Zimbabwe

Zimbabwe to introduce 100 billion dollar note

Sunday 20 July 2008

Zimbabwe's central bank has announced it will introduce a new 100 billion dollar note on Monday, as it continues the fight against crippling hyperinflation, currently at a staggering 2.2 million percent.

HARARE, July 19 (Reuters) - Zimbabwe's central bank will
introduce new higher-value 100 billion Zimbabwe dollar notes on
Monday as part of a desperate fight against spiralling
hyperinflation, the bank said.
 

Zimbabweans are suffering chronic shortages of meat, maize,
fuel and other basic commodities due to the collapse of the once
prosperous economy, which critics blame on President Robert
Mugabe's policies, including his violent seizure of white-owned
farms.
 

Central bank Governor Gideon Gono announced on Wednesday
that inflation had surpassed 2.2 million percent, though some
economists put it much higher.
 

In a notice in the official Herald newspaper on Saturday,
Gono said the Reserve Bank of Zimbabwe would introduce 100
billion dollar special agro-cheques (notes), to help consumers
who currently need to carry large wads of cash even for simple
transactions.
 

"This new $100 billion special agro-cheque will go into
circulation on Monday," the notice said.
 

The central bank has been printing higher denomination
banknotes to keep pace with soaring prices. The most valuable
bank note currently in circulation is worth Z$50 billion.
 

Gono said he was also considering raising the amount of cash
people could withdraw daily from their bank accounts. The
central bank has imposed a withdrawal limit of Z$100 billion,
but this is only enough for two trips on an urban commuter bus
or two loaves of bread -- if one can find it.
 

 The Zimbabwe dollar, which had been officially pegged at
30,000 to the U.S. dollar before exchange rules were relaxed
recently, now trades at about 800 million to the greenback.
 

Besides struggling with shortages of basic goods and
services, Zimbabweans also spend long hours in bank queues
trying to withdraw their money.
 

The central bank says the limits on cash withdrawals are
designed to curtail a thriving black market in foreign exchange
and basic commodities.
 

The worsening economy could add to pressure on the ruling
ZANU-PF party to make concessions to the opposition Movement for
Democratic Change, which has refused to recognise Mugabe's
overwhelming victory in a June 27 presidential run-off election.
 

MDC leader Morgan Tsvangirai won the first round vote on
March 29 but failed to get the absolute majority needed to avoid
a second ballot. Tsvangirai pulled out of that poll, citing
violence by pro-Mugabe militia.
 

Two weeks ago a German firm, Giesecke and Devrient, stopped
deliveries of banknote paper to Zimbabwe following pressure from
the German government amid international criticism of Mugabe's
widely condemned re-election. Gono said Zimbabwe had made
alternative arrangements.