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Zimbabwe Central Bank Issues Z$10 Million Note In Bid To Ease Cash Crunch

Faced with stubborn shortages of cash across Zimbabwe, Reserve Bank Governor Gideon Gono has promised to put bank notes into circulation in denominations of up to Z$10 million (US$5) while increasing what consumers can withdraw from banks.

Gono announced late Wednesday that new bearer cheques - central bank promissory notes, essentially - in denominations of Z$1 million, Z$5 million and Z$10 million would be distributed to banks on Friday. Four weeks ago he unveiled notes for Z$250,000, Z$500,000 and Z$750,000 but cash shortages persisted through the holidays.

Many economists said the central bank needed to issue much higher denominations to meet national needs. Long winding queues were common at banks on Thursday.

It remains to be seen if the new bearer cheques and an increase in withdrawal limits to Z$500 million a day for consumers from Z$50 million previously will restore economic activity - such as it was in a country mired in recession - to normal levels.

Economist Godfrey Kanyenze, director of the Labor and Economic Research Institute of Zimbabwe, told reporter Jonga Kandemiiri of VOA's Studio 7 for Zimbabwe that the new bearer’s cheques are not the way to control inflation - though issuing higher denomination notes could relieve cash shortages over the near term.

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