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Zimbabwe Central Bank Promises Elimination Of Cash Withdrawal Limits

The Reserve Bank of Zimbabwe in consultations Thursday with the nation's largest union said that by mid-January it would abolish limits on how much cash depositors can withdraw from their banks, with stepped increases in weekly withdrawal limits in the meantime.

Harare banks were thronged meanwhile as a new cash regimen allowing individuals to take out up to Z$100 million a week took effect on Thursday. The central bank also introduced a new bank note in the amount of Z$100 million - but by the end of the day its value expressed in U.S. dollars had plunged from US$50 to about US$10 as hyperinflation kicked in.

Correspondent Irwin Chifera of VOA's Studio 7 for Zimbabwe reported from Harare that some retailers boosted prices nearly sixfold in anticipation of a flood of new cash.

In the Midlands province capital of Gweru, the increased withdrawal limit didn't relieve cash shortages - banksran out of cash by midday, as Taurai Shava reported.

Economist Eddie Cross, an advisor to the Movement for Democratic Change formation of prime minister-designate Morgan Tsvangirai, told reporter Chris Gande of VOA's Studio 7 for Zimbabwe that printing higher denomination bank notes like the new Z$100 million note merely fuels hyperinflation and further debases the currency.

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