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Zimbabwe Cash Shortages Persist, Dampening Christmas Spirits

Many Zimbabweans faced the bleak prospect of spending their Christmas Day lining up in search of cash at banks which were to remain open on the holiday, as shortages of cash persisted despite a central bank infusion of Z$20 trillion in new notes.

Reserve Bank Governor Gideon Gono, who last week promised relief from the chronic cash shortages through what he dubbed "Operation Sunrise II," following the chaotic "Operation Sunrise I" of mid-2006, came under fire for allegedly failing to deliver.

The weekly Standard newspaper quoted economic affairs secretary Elton Mangoma of the Movement for Democratic Change faction headed by Morgan Tsvangirai as calling Gono "the biggest saboteur of Zimbabwe's economy." Gono himself blames the acute shortages of bills on parallel market "cash barons" who he says are hoarding money.

The government-controlled Herald newspaper focused its coverage on the crackdown on "cash barons," reporting the arrest Saturday of a Harare woman found with Z$10 billion in new Z$500,000 bearer cheques - central bank promissory notes, in effect.

Police in Harare on Monday summoned ruling party lawmaker David Butau, alleging that he had violated exchange control regulations. Butau, chairman of the committee on budget and finance, last week declined an offer by Gono to furnish his committee with names and other details concerning senior government officials and business executives said to be among those hoarding cash outside the banking system.

Since Gono announced the operation last Wednesday the central bank is said to have injected Z$20 trillion into the banking system in notes in denominations of Z$250,000, Z$500,000 and Z$750,000, ordering banks to stay open through the holiday.

But the scale of the operation looked inadequate given that at exchange rates on the parallel market where most business gets done in Zimbabwe these days, Z$20 trillion amounts to only about US$10 million even with Zimbabwe cash dollars at a premium.

Harare resident Chipo Muchineripi told reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe that although Zimbabweans like herself are lining up at banks early in the morning there is little cash available so this Christmas will be a bleak one.

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