Jul 25, 2008

World - Zimbabwe has no banknote paper

Harare: Zimbabwe’s government is struggling to find enough cash to pay its workers, and more importantly the military, after it was forced to cut back on printing money because sanctions have severed its supply of banknote paper from Europe.
Officials involved in the printing said the regime fears the presses could be shut down altogether if further political pressure causes the withdrawal of software licences used to design and print notes.
Paper money is already in short supply because the state-run Fidelity Printers & Refiners in Harare cannot keep up with demand created by the hyperinflation and rapid devaluation that causes notes to lose almost their entire value within weeks of being issued.Highest denomination
On July 21, the central bank issued a Z$100-billion note, the highest denomination to date but worth seven pence, printed on what remains of stocks of the German paper. The cash shortage is contributing to the rapidly deepening economic crisis and further threatening Mr. Mugabe’s regime.
The government needs to ensure money reaches the Army. Zimbabweans are limited to withdrawing just Z$100 billion a day from their accounts, less than half the cost of a loaf of bread.
The trade unions wrote to the Central Bank asking it to remove the daily limit, describing it as a “joke.”
“As you may be aware, transport alone, costs around Z$150 billion, on average. How then do the monetary authorities expect an ordinary employee to report for duty and go back home when he or she is allowed to only withdraw a maximum amount of Z$100 billion,” asked the unions.

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