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Article#0002        Date: 31 May 2006             Country: Zimbabwe

Zim introduces new Z$100 000 note to stem cash crisis!

May 31, 2006, 00.05 HRS BST

The new Z$100 000 note is unlikely to bring any relief to embattled Zimbabwean consumers.

HARARE - The Zimbabwean government has said it will be introducing a new 100 000 dollar note (£0.22) on June 1 to ease widespread cash shortages that have seen long queues resurface at banking instituitions around the country.

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Reserve Bank of Zimbabwe governor Gideon Gono told state television on Tuesday that the new note was in line with the country's rampant inflation which currently stands at a staggering 1 042.9 percent and the highest in the world. The Harare authorities introduced the bearer cheques, which are not cash but function exactly as ordinary banknotes, as a stop gap measure in 2003 after severe cash shortages that gripped the country.

The cheques were initially to be withdrawn from circulation after one year but three years later remain the main means of cash transaction as Harare grapples with an unprecedented economic crisis that has been described by the World Bank as unseen for a country not at war.

Banks in Harare began rationing cash last weekend with clients being allowed to withdraw only a maximum of Z$5 million per individual. There were long queues at most banks and building societies in the capital Harare yesterday.

A manager with a local bank in Harare who refused to be named for professional reasons said they had begun limiting withdrawals to a maximum of Z$5 million per individual because of the cash shortage.

Harare resident Joseph Chihota, told a Zimbabwean newspaper yesterday that he had queued for close to four hours at a bank in central Harare before he was allowed to withdraw $5 million or a third of the $15 million he had hoped to get.

"It is the hardest thing to do to have to queue for so many hours to access your savings and then being told you can only withdraw such a little amount," said a visibly angry Chihota.

Zimbabwe is in its sixth year of a bitter economic crisis critics blame on President Robert Mugabe's policies. With an inflation rate of more than 1 000 percent, prices of basic commodities are rising on a daily basis forcing consumers to withdraw huge sums of money from banks.

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Earlier this year, the Zimbabwe government introduced a new Z$50 000 bearer cheque in line with the country's galloping inflation.

Economists last month warned that inflation was set to rise further after Mugabe awarded hefty salary increments to teachers and soldiers in a move they said was meant to buy the army's support ahead of opposition protests this winter.

The main opposition Movement for Democratic Change party has threatened to unleash street demonstrations this winter to protest against worsening economic conditions in the country.

The World Bank and the International Monetary Fund blame Mugabe for ruining the country's once vibrant economy through mismanagement particularly his policy of seizing white-owned farms for redistribution to landless blacks six years ago.

Original Article: http://www.gozimbabwe.com/bearer_060531.html

Page created:     7 June 2006
Last Update:      7 June 2006

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