Zimbabwe will soon introduce higher denomination banknotes, of up to one million Zimbabwean dollars, in a bid to ease the effects of hyperinflation, the country’s central bank said on Monday.
The Southern African country lopped 10 zeros off the currency on August 1, but it continues to lose value as inflation surges.
The government put inflation at 230-million percent for July, the world’s highest, although the Washington-based Cato Institute foundation estimates it now at 10,2-quadrillion percent.
Currently, the highest denomination banknote is Z$50 000, not enough to buy a loaf of bread, and the central bank plans to introduce Z$100 000, Z$500 000 and Z$1-million (about $8) banknotes in a bid to help consumers battling to make simple purchases.
”In the measures under way, the Reserve Bank plans to introduce a number of new, higher denominations; review the cash withdrawal limits, as well as commence aggressive campaigns for increased usage of alternative means of payment,” the central bank said in a statement.
Zimbabwe’s economic crisis — blamed on President Robert Mugabe’s policies — has worsened amid a stalemate over Cabinet positions in a power-sharing government the veteran ruler agreed to form with opposition rival Morgan Tsvangirai on September 15.
Analysts say the power-sharing pact offers the best chances of hauling the country out of its worst economic crisis, but hopes of a quick turnaround have been dimmed by a disagreement over key ministerial appointments, which now threatens the deal. – Reuters