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Zimbabwe Z$200,000 Note Useful, Economists Say, But No Panacea

The introduction of a new Z$200,000 bank note by the Reserve Bank of Zimbabwe this week will make life slightly easier for Zimbabweans as they go about their daily business, economic observers said, but the mitigation is slight and unsustainable.

Economist Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe said that as the central bank intended, the introduction of the new note has made transactions easier by reducing the volume of cash needed.

But Chitambara said the longer-term monetary solution is more complicated.

Chitambara said the government of President Robert Mugabe has been reluctant to introduce notes of a higher denomination, because doing so could be interpreted as a tacit admission that official economic policies have failed. Harare has stopped issuing inflation reports, but the cost of living is rising at something over 5,000% a year.

Chitambara told reporter Ndimyake Mwakalyelye of VOA's Studio 7 for Zimbabwe that the government is in a bind, and that its short-term fixes are costly.

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