Tuesday, May 30, 2006

Mugabe has no money to print money

Cash shortages have returned to haunt Zimbabweans. Banks started rationing money on Friday, allowing clients to withdraw only Zim$5 million (about US$49) to avert crowd trouble, but most ran out of mint-print, prompting desperate clients to form overnight queues outside.

Last month the government awarded civil servants hefty salary increases after the opposition Movement for Democratic Change urged them to join planned future demonstrations. Official sources said the recent 150 percent pay rise for soldiers, teachers, policemen and nurses had put a strain on money supply.

Reserve Bank officials told IRIN that plans to print about Zim$60 trillion (about US$592.9 million) were briefly delayed after the government failed to secure foreign currency to buy ink and special paper for printing money.

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