Accessibility links

Zimbabwe Produces New $200,000 Bank Note


Zimbabwe's central bank has printed yet another higher denomination bank note in an effort to keep pace with the country's soaring inflation. Peta Thornycroft reports that the Zimbabwe currency is now largely worthless and the economy is in its fastest period of shrinkage since the financial and political crisis began seven years ago.

Zimbabwe's new $200,000 bank note is called a bearer check and is printed in Harare.

The new note is worth about $800 U.S. at the official rate of exchange. However, the official rate is only available to a select few in the government.

For the rest of the population, the value of the $200,000 note is calculated on the black market and is worth about one $1. Ordinary people can only get foreign cash on the black market.

The Reserve Bank of Zimbabwe said in an advertisement in the state-controlled daily Herald newspaper Tuesday that it was "introducing the new $200,000 Zimbabwe bearer cheque with effect from 1 August 2007."

A year ago, the Reserve Bank launched Operation Sunrise to boost the chronically failing economy.

The bank issued a series of new bearer checks and slashed three zeros off the currency. The new $200,000 note would be worth $200 million if the zeros were still there.

Officially Zimbabwe has about 5,000 percent inflation, the highest in the world. Economists say the real rate is about double that.

Earlier this month the government re-introduced price controls for a whole variety of goods and services and cut retail prices by about 50 percent, far below production costs.

Since then, essential food has disappeared from supermarkets around the country.

Zimbabwe police say they arrested nearly 5,000 businessmen for overcharging since the price freeze.

The staple food maize meal, as well as sugar, cooking oil, meat, milk, eggs and bread have largely disappeared from the market.

On Monday, police began arresting vendors who were selling some of these items on the black market.

Reserve Bank governor Gideon Gono has criticized the price freeze, but has refused to implement International Monetary Fund recommended reforms to the economy.

To pay government debts, President Robert Mugabe and Gono have approved printing of money.

XS
SM
MD
LG