Zimbabwe prepared on Friday to slash three more zeros from its currency for the second time in a year, as inflation soars in the crippled economy.
Central bank Governor Gideon Gono said after months of planning, the issue of new currency bills was ”imminent”, state television and radio reported.
The television showed a sample of a new Z$500 note.
The highest existing bill for Z$200 000 becomes Z$200.
”I know the zeros we removed last time came back quickly but this time we are doing it in such a way they will not return,” Gono told a televised meeting of banking and business leaders. He did not elaborate.
Zimbabwe has suffered chronic shortages of local cash this month, which created long lines at banks and ATMs not shut down by the daily power failures.
Gono accused speculators of hoarding cash, saying the new denominations would replace the old in a changeover lasting a day or two.
He said holders of cash needed to urgently deposit it into the formal banking system ”before it turns to useless manure”. Banks and finance houses were asked to extend their business hours to accommodate depositors.
The state Central Statistical Office said on Thursday its monthly announcement of official inflation scheduled for early November was still not ready, but an independent business weekly newspaper said leaked figures showed official inflation at 14 800%, up from 8 000% in early October, which was then by far the highest in the world.
A government order in June to reduce inflation by slashing prices of all goods and services by half left shelves bare of the corn-meal staple, bread, meat, cooking oil, sugar and other basic goods. It also worsened acute gasoline shortages.
This month prices of available goods generally exceeded prices before the June 26 directive after a series of price increases were permitted to restore the viability of supplies from producers and manufacturers.
Independent estimates put inflation at close to 40 000% this month, and the International Monetary Fund has forecast it reaching 100 000% by the end of the year.
Store executives said supplies of food and small luxuries such as Christmas chocolate, paper crackers and cheap toys normally stocked in November have not resumed despite central bank loans to producers at 25% interest, compared with general interest rates of about 600%.
The state daily newspaper, the Herald, one of the cheapest items on the market, doubled its cover price to Z$300 000 on Wednesday.
The last changeover to new currency triggered a buying spree of luxuries as Zimbabweans offloaded spare money before it became obsolete.
This time around, there are few luxuries to buy.
According to the state broadcaster, Gono warned the switch to new money would be ”swift and precise” and was not a bluff to scare hoarders to put their cash back into the financial system.
He said in efforts to combat black-market money dealing, police and central bank surveillance teams were watching for bulk deposits and will demand details of the source.
”Where no convincing proof is rendered, the money will be frozen at zero interest in anti-money laundering bonds for a minimum period of five years pending investigations,” he said. — Sapa-AP