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Zimbabwe Central Bank Issues New Notes In Bid To Counter Cash Crunch

Moving to relieve acute cash shortages nationwide, the Reserve Bank of Zimbabwe on Monday introduced new bank notes in denominations of Z$10,000 and Z$20,000 dollars - respectively 100 trillion dollars and 200 trillion dollars in the old currency, still in circulation.

This move by the central bank was in tandem with an increase in the daily limit on how much cash consumers can withdraw from bank accounts to Z$20,000 from Z$1,000. Due to roaring hyperinflation that Z$1,000 barely covered a round-trip bus ride for Harare commuters.

But the new notes and higher withdrawal limit may not provide relief for very long, according to economist John Robertson of Harare who told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that inflation is running at such a clip that it will soon hollow out the value of notes in whatever denomination that the central bank may issue.

Hyperinflation was last measured at 11.2 million percent in June, but economists estimated that by now it is probably running at 40 million or 50 million percent.

Issuance of the new currency and the higher withdrawal limit led the Zimbabwe Congress of Trade Unions to call off a labor action it had threatened to protest the cash crisis.

Correspondent Irwin Chifera of VOA's Studio 7 for Zimbabwe reported that the ZCTU also said that although it remains skeptical of the power-sharing arrangement between the former ruling ZANU-PF and the Movement for Democratic Change, it would give it a chance.

More reports from VOA's Studio 7 for Zimbabwe...