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Amid Roaring Hyperinflation, Zimbabwe Sets New Cash Holding Limits

The Zimbabwean government has made it illegal for citizens to hold more than Z$500 million in cash, currently equivalent to just over 20 U.S. dollars.

A recently introduced statutory instrument says anyone found in possession of more than this sum can be charged with unlawful hoarding.

Companies are barred from settling bills over $250 million, about US$10, with cash. In recent days the exchange rate against the U.S. dollar has soared to Z$24 million.

The decree was issued in an effort to regain control over the money supply and to put what Reserve Bank Governor Gideon Gono calls "cash barons" out of business. He coined the phrase to describe large operators on the country's bustling parallel markets in foreign exchange and most essential commodities.

A loaf of bread costs about Z$5 million; a single egg fetches some Z$1.7 million.

Economist Luxon Zembe, a former president of the Zimbabwe National Chamber of Commerce, told reporter Jonga Kandemiiri of VOA's Studio 7 for Zimbabwe that the law will merely make life harder for ordinary people who need to carry large amounts of cash to buy scarce goods that can only be found on parallel or black markets.

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