The Reserve Bank of Zimbabwe came out this week with bank notes in denominations of Z$100 million and Z$250 million in an effort to keep pace with hyperinflation which has officially reached 165,000% and has probably accelerated well beyond that.
The state-controlled Herald newspaper quoted Reserve Bank Governor Gideon Gono as saying that the new notes responded to business demand for more cash. Lines for cash withdrawals appeared again recently outside banks in Harare and other cities, reflecting scarcities of notes given the huge sums involved in ordinary transactions.
But some observers said the appearance of the new bearer cheques - central bank promissory notes, in effect - have merely sparked a fresh round of price increases for essentials such as bread, maize meal, cooking oil and commuter transport, by nurturing expectations that hyperinflation will keep roaring along.
Economist Luxon Zembe, a former president of the National Chamber of Commerce, told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that the notes won’t necessarily ease cash shortages but will at least lighten the burden of the cash that consumers and business people need to carry, and reduce RBZ printing costs.