Monday, May 5, 2008
Zimbabwe Releases $250 Million Bank Note
In a sign of the growing worthlessness of Zimbabwe's currency, the country's central bank on Tuesday introduced two new banknotes - a 100 million Zimbabwe dollar note and a 250 million Zimbabwe dollar note.
The launch of the new notes, which was announced on state television Monday night, comes barely a month after the Reserve Bank launched what has been until now the largest single note - 50 million dollars.
But with inflation running at over 165,000 per cent, 50 million dollars no longer buys a loaf of bread, which costs about 80 million dollars. A bunch of five bananas also comes out at close to 100 million dollars.
The new notes, like all Zimbabwean bank notes, are bearer's cheques with an expiry date. The smaller notes expire at the end of June 2008.
The populist policies of President Robert Mugabe's government, including a disastrous land reform program, have been widely blamed for the decimation of the currency.
On Monday the Zimbabwe dollar was trading in banks at about 200 million dollars to 1 US dollar.
Zimbabwe's economic chaos is seen as the key factor behind Mugabe's defeat in March presidential elections. Official results showed opposition leader Morgan Tsvangirai taking 47.9 per cent of the vote, against 43.2 for Mugabe.
Tsvangirai's failure to take the more than 50 per cent of votes needed for an outright win means a runoff between the two is likely.
The Zimbabwe Electoral Commission is expected to announce a date for a runoff in the coming days. Mugabe has said he will participate but Tsvangirai's Movement for Democratic Change, which insists he won outright, has yet to announce whether their man will take part.