Accessibility links

Breaking News

Zimbabwe Central Bank Lightens Purses By Issuing Z$50,000 Note

Zimbabwe's central bank introduced new bills Thursday in denominations of Z$5,000 and Z$50,000 to relieve consumers obliged to carry large wads of banknotes in an economy ravaged by an annual inflation rate recently measured at 1,600%.

Economists said the bank’s decision to create new denomination of bearer cheques - central bank scrip - came as no surprise given unrelenting hyperinflation.

Bank automated teller machines for some time have dispensed nothing smaller than a Z$10,000 bearer cheque, the equivalent of US$1.35 at the parallel market exchange rate, which has recently surged from some Z$5,000 to Z$7,500 to the U.S. dollar.

The Reserve Bank of Zimbabwe has held the official rate at Z$250 since July, when it lopped three zeroes from the old currency and introduced new bearer cheques.

Then-finance minister Herbert Murerwa warned the zeroes would be back. Although President Robert Mugabe sacked him early this year, he has been vindicated.

Harare economist John Robertson told reporter Blessing Zulu of VOA’s Studio 7 for Zimbabwe that the new denominations are just a stopgap measure - and an admission by the central bank that the government has failed to master inflation.

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