Zim issues higher bank note to fight inflation

HARARE – Zimbabwe’s central bank will issue a higher denomination bank note today to cope with the hyperinflation ravaging the southern African country.

President Robert Mugabe’s government lopped three zeroes off the local currency a year ago but Zimbabweans still need to carry huge wads of cash for basic transactions. In a statement on Tuesday, the Reserve Bank of Zimbabwe said a Z$200 000 note would come into circulation from August 1.Currently, the highest banknote in circulation is Z$100 000.The new note is worth one US dollar on Zimbabwe’s black market for foreign currency and about U$13 at the official rate.The IMF said on Tuesday Zimbabwe’s year-on-year inflation rate could top 100 000 per cent by the end of the year.Last month, the government ordered prices to be cut for all goods and services and effected a price freeze after prices had risen by as much as 300 per cent within a week.This has deepened an economic crisis, marked by severe food, fuel and foreign currency shortages as well as high unemployment.The price blitz led to hundreds of business people and traders being arrested and fined for overcharging or failing to display prices.It has worsened shortages of most basic goods such as the staple maize-meal, cooking oil, meat and sugar.Mugabe’s government says the crackdown is necessary to bring order in commerce and industry, and to stop what he says is a drive by opponents to try to oust him through economic sabotage.Mugabe, 83 and in power since independence from Britain in 1980, denies he has run down one of Africa’s most promising economies with his controversial policies.He says the economy is a victim of Western opponents seeking to overthrow his ZANU-PF government for seizing and redistributing white-owned commercial farms to landless blacks.Nampa-ReutersIn a statement on Tuesday, the Reserve Bank of Zimbabwe said a Z$200 000 note would come into circulation from August 1.Currently, the highest banknote in circulation is Z$100 000.The new note is worth one US dollar on Zimbabwe’s black market for foreign currency and about U$13 at the official rate.The IMF said on Tuesday Zimbabwe’s year-on-year inflation rate could top 100 000 per cent by the end of the year.Last month, the government ordered prices to be cut for all goods and services and effected a price freeze after prices had risen by as much as 300 per cent within a week.This has deepened an economic crisis, marked by severe food, fuel and foreign currency shortages as well as high unemployment.The price blitz led to hundreds of business people and traders being arrested and fined for overcharging or failing to display prices.It has worsened shortages of most basic goods such as the staple maize-meal, cooking oil, meat and sugar.Mugabe’s government says the crackdown is necessary to bring order in commerce and industry, and to stop what he says is a drive by opponents to try to oust him through economic sabotage.Mugabe, 83 and in power since independence from Britain in 1980, denies he has run down one of Africa’s most promising economies with his controversial policies.He says the economy is a victim of Western opponents seeking to overthrow his ZANU-PF government for seizing and redistributing white-owned commercial farms to landless blacks.Nampa-Reuters