Dec 3, 2008

World - Inflation-wracked Zimbabwe issues 100-million dollar note

Zimbabwe police beat up about 20 people protesting on Wednesday over their inability to get their money out of banks as the authorities prepared to issue the first 100-million-dollar notes.

Officers used batons to hit the protesters, members of the Zimbabwe Congress of Trade Unions (ZCTU) who had gathered for a protest march, an AFP correspondent at the scene reported.

No arrests have been made yet and the ZCTU said it would release a formal statement later on Wednesday.

Zimbabwe has issued three new denominations of banknotes, including a one-hundred-million-dollar note, as the impoverished country struggles to cope with runaway inflation, state media reported on Wednesday.

The Reserve Bank of Zimbabwe (RBZ) said the release of the new notes followed recent a review of the limit on cash withdrawal.

The limit has been revised upwards to 50 million Zimbabwe dollars for individuals and 100 million for company account holders, The Herald said.

Before the recent increase, the withdrawal limit for individual account holders was 500,000 dollars while companies were allowed to withdraw one million dollars a day, it said.

The introduction of the new notes -- 100 million, 50 million and 10 million -- comes at a time when depositors have been spending hours in long queues at banking halls and cash dispensers to withdraw, the newspaper said.

The new notes will come into circulation on Thursday, it said.

RBZ governor Gideon Gono, whose five-year term has just been renewed, recently announced that the bank was working to ensure that workers had enough cash during the festive season.

The new move comes less than a month after the central bank introduced one million, 500,000 and 100,000 notes, to deal with the skyrocketing prices of basic goods.

The 100,000 banknote is worth only one US dollar on the widely-used parallel black market and is only half the amount needed to buy a loaf of bread.

Twenty-seven new currency denominations have been introduced in Zimbabwe this year alone.

Once described as a model economy and a regional breadbasket, Zimbabwe's economy has collapsed over the past decade and there are now shortages of basic foodstuffs like sugar and cooking oil.

When Gono was appointed in November 2003, inflation was 619.50 per cent but as of July, annual inflation hit 213 million per cent.

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