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Zimbabwe Introduces $100,000 Bill


The Zimbabwean government Wednesday announced the introduction of a $100,000 Zimbabwe dollar bill just four months after introducing a $50,000 bill. The new note comes at a time when inflation exceeds 1,000 percent.

The $100,000 Zimbabwe note, equivalent to $ 0.98 U.S. at the official rate, comes into circulation Thursday.

A report in the state-controlled daily newspaper, The Herald, quotes central bank governor Gideon Gono as saying the last highest denomination note, the $50,000 bill, which is not enough to buy a loaf of bread, had been overtaken by inflationary events.

Gono said the bank would not hesitate to introduce an even higher denomination should the need arise. This, the Herald said, may be a hint that "the battle against inflation might be far from won." Zimbabwe inflation is now the highest in the world at 1,042 percent.

The new note comes in the form of the so-called bearer checks introduced in 2003 when Zimbabwe ran short of cash. The bearer checks are like normal currency, although they are not real money. They were meant to be phased out as soon as the money supply got back to normal. But with inflation rising as it has been doing, the checks may be around for a while.

The introduction of the new denomination note comes at a time when the long lines, reminiscent of the cash shortage, started re-appearing outside banks. The banks were also starting to limit cash withdrawals.

This did not go down well with their customers.

"With inflation so high what they are giving us won't go very far and we'll be back in line again tomorrow," complained a client who spoke to VOA on condition of anonymity. Observers say the shortages were the result of substantial salary increases awarded to civil servants last month.

Last October, Gono announced that an unnamed new currency would be introduced in the new year. He did not give a date for the introduction of the new currency and it has yet to take place. Analysts now say the new currency is unlikely due to shortages of ink and paper in the country.

Zimbabwe is experiencing its worst economic crisis since independence in 1980. Food, fuel and foreign currency are in short supply and more than 80 percent of the work force is unemployed.

Critics of Mr. Mugabe blame mismanagement by his government for the problems. Mr. Mugabe in turn blames "sanctions" imposed on the country by western countries as, according to him, punishment for the sometimes violent land reform exercise which saw white farmers losing their land for the resettlement of landless blacks.

The European Union and the United States have imposed a travel ban on Mr. Mugabe and senior members of his party and government. No trade sanctions are in place.