/ 6 May 2008

Zim to introduce new banknotes to fight prices

Zimbabwe’s central bank said on Monday it will introduce new higher-value banknotes in its latest attempt to ease the effects of hyperinflation.

The Z$100-million and Z$250-million bills will go into effect from Tuesday.

”The move is meant to minimise inconveniences to the banking public and the corporate sector,” central bank Governor Gideon Gono said in a statement.

Previously, the country’s highest value note was a Z$50-million bill, introduced in March. The new highest denomination note is worth about three loaves of bread.

Zimbabwe, which has the highest inflation rate in the world above 165 000%, has been beset by long queues at banks as consumers seek banknotes to stock up basic goods, whose prices frequently skyrocket.

Zimbabwe’s central bank last week relaxed tough rules restricting foreign-currency trade, introducing a ”willing buyer-willing seller” policy that took effect on Monday.

The Zimbabwe dollar, which had been officially pegged at 30 000 to the United States dollar before the rules were changed, traded at an average Z$165-million to the greenback. — Reuters