New banknotes, including a Z$10-million bill, will go into circulation in inflation-ravaged Zimbabwe this week, the central bank’s governor said on Wednesday.
Less than a month after announcing a similar move, Gideon Gono said the new notes would provide much-needed relief to consumers who often have to go shopping with sacks of cash.
“With effect from Friday, the Reserve Bank of Zimbabwe is releasing the following bearer cheques into circulation: Z$1-million [officially worth about $33], Z$5-million and Z$10-million,” Reserve Bank Governor Gono told a news conference.
“Further to provide relief and convenience to the transacting public, daily cash withdrawals have been increased from the current Z$50-million to Z$500-million per individual. This takes effect from Friday,” he said.
Last December 19, Gono announced the immediate introduction of higher denominations of banknotes in a bid to tackle cash shortages fed by runaway inflation.
The following day, Z$250 000, Z$500 000 and Z$750 000 notes officially came into circulation.
Gono had expressed hope at the time that the new notes would mean “cash shortages will be a thing of the past”, but they continued unabated.
The Southern African country is gripped by an economic crisis characterised by the world’s highest rate of inflation, officially put at about 8 000%, shortages of basic foodstuffs such as cooking oil and mass unemployment.
“As monetary authorities we once again assure the nation that we are in full control of the currency situation in the country and it is never our intention, nor is it part of our philosophy, to cause unnecessary pain to fellow Zimbabweans,” Gono told reporters.
“In this regard, the central bank will continue to formulate and implement tangible solutions to the challenges that the financial sector is currently facing for the benefit and convenience of the public.”
The bank governor said the situation was being exacerbated by what he termed as “indiscipline” and corruption.
Speculation “has become endemic in our country and this is now disrupting the free circulation of cash in the economy”.
“There is growing evidence that part of what we see as cash queues at banks is partly an indication of inflated demand for cash as some depositors have developed a perpetual habit of withdrawing their entire savings, even if they have no immediate need for cash,” he added. — AFP