Zimbabwe central bank introduces 100 billion dollar bearer cheque

Jul 19, 2008, 11:50 GMT

Johannesburg/Harare - Zimbabwe's central bank has introduced a bearer's cheque of 100 billion Zimbabwe dollars in a bid to ease recurrent cash shortages bedeviling an inflation-ravaged economy.

Zimbabwe has not had formal currency since the introduction of bearer cheques as a temporary measure in 2003.

The new bills officially come into circulation on Monday but on Saturday they were on already on the foreign currency dealers market.

Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono said the new notes were for 'the convenience of the banking public and the corporate sector,' in light of the price hikes.

The official inflation rate in once-prosperous Zimbabwe now stands at 2.2 million per cent.

'The RBZ has noted with concern the unjustifiable and incessant general increases in the prices of goods and services. It is therefore appealing to the business community to follow ethical business practices as well as take an interest in the plight of the general public,' Gono's statement of July 18 said.

Since December 2007 Zimbabwe has introduced bank notes worth 250,000 Zimbabwe dollars, 500,000 Zimbabwe dollars, and 750,000 Zimbabwe dollars, which were followed by the 1 million Zimbabwe dollars 5 million Zimbabwe dollars and 10 million Zimbabwe dollars notes in January, and later 25 million and 50 million Zimbabwe dollars, and sets of five, twenty-five and fifty billion Zimbabwe dollars in May.

The 100 billion Zimbabwe dollar note, which expires on 31 December 2008, cannot buy a loaf of bread, which now costs at least 120 billion Zimbabwe dollars, but it can purchase four oranges.

Many notes except those in denominations of billions can now found in bins and as litter in the streets.

'The RBZ is fighting a losing battle; as long as the inflation remains high, cash shortages will persist,' economist John Robertson said.

'There is need to address the inflation by increasing production so that too goods do not chase at lot of money.'