Wednesday, May 31, 2006


Zimbabwe introduces $100,000 note

BBC NEWS - Zimbabwe is introducing a bank note worth 100,000 Zimbabwe dollars, to help consumers as inflation exceeds 1,000%.

The note will be worth about $1 at the official exchange rate, but only $0.30 on the informal market.

The 50,000 Zimbabwe dollar bill, introduced only four months ago, is not enough to buy a loaf of bread.

The government on Tuesday used its mineral exports to gain access to a $50m loan from a European bank, to pay for essential fuel and drugs.

"It is not the first and last time to see us introducing bearer cheques and we will not hesitate to introduce higher denominations," Reserve Bank governor Gideon Gono said, according to the state-run Herald newspaper.

The bills are known as bearer cheques since they are promissory notes rather than official legal tender, but are used in Zimbabwe in the same way as money.

Bundles of money

The issuing of bearer cheques began with a note worth 10,000 Zimbabwe dollars, to reduce the need to carry large bundles of paper money.

The government has announced a National Economic Development Priority Programme (NEDPP) in order to deal with the economic problems.

Zimbabwe is suffering from shortages of food, fuel and foreign currency. In April, inflation passed 1,000% per annum for the first time.

President Robert Mugabe blames domestic and foreign enemies for the problems, while his critics point to the collapse of agricultural exports following a controversial land reform programme.

The country is struggling to pay civil servants and is thought to owe money to neighbours such as South Africa and Mozambique from whom it is been importing electricity and fuel.