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Zimbabwe Introduces New Cash Notes as Inflation Soars


Zimbabwe's central bank has introduced higher denomination currency notes in an effort to deal with a raging inflation rate. Peta Thornycroft reports for VOA that the central bank recently introduced so many controls over commercial banks that the country's hard-strapped wage earners are unable to withdraw enough cash from their accounts to survive.

On Wednesday, Reserve Bank of Zimbabwe Governor Gideon Gono announced that by year-end the government will withdraw what is the highest currency denomination, the 200,000 Zimbabwe dollar note.

It will be replaced by a 250,000 dollar note, a 500,000 dollar note, and a 750,000 dollar note.

None of those higher value notes are worth $1 U.S., or even a bar of soap, which in the current inflation-wracked economy costs about five million Zimbabwe dollars.

Central Bank Governor Gono said he has decided not to chop off zeros as he did last year when computer systems crashed because of such an attempt.

Meanwhile, cash withdrawals from banks are limited to a maximum of $33 U.S. a day, which means endless queues with many sleeping outside banks overnight to get enough cash.

Zimbabwe Law Society President Beatrice Mtetwa is one of Zimbabwe's top human rights lawyers. She says the central bank was using what she described as 'deliberate control over people's lives.' She said it is not coincidental that this is happening during the annual Christmas and end-of-year holidays. The effect of the controls, she said, would prevent urban people traveling to their rural homes.

Most opposition supporters live in urban areas.

She said the limits on cash withdrawals were an assault on property rights and also affected people's ability to purchase items for sustenance. She said every aspect of a human being's most basic rights were affected by the central bank's controls.

Harare economist and former president of the Zimbabwe National Chamber of Commerce Luxom Zembe said people cannot access their money. He described the present shortage of cash and the suffering mostly endured by the poor as "pathetic."

Bank Governor Gono said he is trying to curb the black-market trade in foreign currency.

The usually docile state media, clearly upset at the unprecedented shortage of cash, on Wednesday evening accused the central-bank governor of being the largest player on the black market. He denied this.

Questions sent to the central bank were not answered.

Earlier this year the International monetary fund predicted Zimbabwe inflation would hit 100,000 percent. The IMF has just left Harare, after gathering information for its annual consultations due early next year.

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