Thursday, June 01, 2006

Z$100 000 only enough to buy a loaf of bread

A NEW $100,000 banknote will be issued in Zimbabwe today. With a value of about 67p, it is worth only the price of a loaf of bread...

Despite the hyperinflation, mass unemployment and crippling shortages of fuel and foreign currency, Zimbabwe is a country of millionaires. Shoppers have to carry huge wads of cash to buy the basic foodstuffs available in most shops.

“Last week I filled a single trolley with $30 million of groceries, and I had to count out 600 notes of $20,000 at the checkout counter,” John Robertson, an economist, said.

Despite the economic gloom, he said that at least the new note “means when we go shopping, we don’t have to take a suitcase of money: we can carry it in a shoulder bag”.

As the Government announced the introduction of the note, queues were forming outside banks that had begun to limit withdrawals because of the latest shortage of currency. All coins disappeared from circulation two years ago.

Gideon Gono, governor of the central bank, said that the note was being introduced “to ensure convenience to the public”. Although he predicted that inflation would be down to 50 per cent in a year’s time, he held out the prospect of even bigger denominations if the new note failed to ease the banking problems....

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