Zimbabwe cranked up the face value of its highest banknote fivefold on Thursday as black-market trading in scarce gasoline and hard currency spiralled. On the illegal market, a single United States dollar bought up to Z$8 000, up from Z$5 000 last month.
Zimbabwe cranked up the face value of its highest banknote fivefold on Thursday as black-market trading in scarce gasoline and hard currency spiralled.
On the illegal market, a single United States dollar bought up to Z$8 000, up from Z$5 000 last month. The fixed official exchange rate is Z$250 dollars to US$1.
Dealers said the surge in black-market currency rates stemmed from uncertainty in the crumbling economy amid rumours of a forthcoming government freeze on wages and prices to curb record inflation and a possible devaluation of the local currency.
Gasoline sold for up to 20 times the official price on Thursday, an increase of about 30% in the past week.
The central bank released a new Z$50 000 note. The new note bought just one-sixteenth of what it would have bought a year ago.
Phonies Zombi, a shopper in Harare, said she used it for a pack of low-grade meat, soap, a household cleaner, eggs and vegetables.
Previously, the largest note in the hyperinflationary economy was a Z$10 000 bill worth US$40 at the official rate, or US$1,25 on the black market.
In August, the central bank slashed three zeros from the currency in a bid to eliminate the need to use bags and large bundles of currency for the smallest purchases and to free accounting systems, calculators and computers from the burden of coping with numbers in multi-millions.
Zimbabwe is suffering from its worst economic crisis since independence in 1980, with inflation of nearly 1 600%, the highest in the world. The International Monetary Fund forecasts it will hit 4 000% this year.
Earlier this week, central bank governor Gideon Gono acknowledged the country was hungry and broke, largely as result of a chaotic and often violent land-reform programme since 2000, which turned over more than 5 000 white-owned commercial farms to black people in the former regional breadbasket.
In a bid to quell signs of mounting unrest, the government last week banned all political rallies for three months. Officials dispersed an illegal march of defiant labour and reform activists on Wednesday.
The main labour organisation, the Zimbabwe Congress of Trade Unions, has called for a series of national protest strikes in coming weeks.—Sapa-AP