Friday January 16, 06:41 AM
Zimbabwe unveils 100 trillion dollar note
HARARE (AFP) - Zimbabwe will introduce a 100 trillion dollar note, in its latest attempt to keep pace with hyperinflation that has left its once-vibrant economy in tatters, state media said Friday.
The new 100,000,000,000,000 Zim (ZIMCF.OB - news) -dollar bill would have been worth about 300 US dollars (225 euros) at Thursday's exchange rate on the informal market, where most currency trading now takes place, but the value of the local currency erodes dramatically every day.
The Reserve Bank of Zimbabwe is introducing three other notes in trillion-dollar denominations of 10, 20 and 50, the government mouthpiece Herald newspaper said.
"In a move meant to ensure that the public has access to their money from banks, the Reserve Bank of Zimbabwe has introduced a new family of banknotes which will gradually come into circulation, starting with the 10 trillion Zimbabwe-dollar," the bank said in a statement quoted by the Herald.
Just last week, the bank had introduced billion-dollar bills in denominations of 10, 20 and 50 with the same goal, but those notes are no longer large enough to keep up with hyperinflation.
The last official estimate put inflation at 231 million percent in July, but outside experts now believe it is many times higher.
When Zimbabwe's leader Robert Mugabe first took power in 1980, following independence from Britain, the local unit was worth about the same as the British pound.
With the local currency in freefall, everyone from streetside vegetable vendors to mobile phone service providers are pegging their prices in foreign currency to hedge against losses.
Zimbabwe's central bank has licensed at least 1,000 shops to sell goods in foreign currency in a move aimed at helping businesses suffering from a chronic shortage of foreign currency to import spare parts and foreign goods.
Other shops and service providers have followed suit although they have not been authorised by the government and have done so despite warnings that those arrested for flouting foreign exchange regulations would be prosecuted.
Even basic commodities are scarce in Zimbabwe, driving up their prices in US dollar terms and making life here more expensive than in neighbouring countries, while an estimated 80 percent of the population has been driven into poverty.
The crisis has left Zimbabwe's health services in tatters, with government doctors and nurses on an indefinite strike to demand higher wages after hyperinflation turned their salaries into pittances.
Even if the doctors were on the job, public hospitals and clinics have no money to buy medicine or equipment, no clean water, and often scant supplies of electricity.
Most teachers have left the classroom to eek out a living elsewhere, and end-of-year examinations taken in November have yet to be graded after the markers demanded their wages in foreign currency, the Herald said Friday.
Schools were supposed to re-open this week for the new academic year, but government has already pushed back the start of classes by two weeks since students don't yet know if they passed.
The breakdown in the national infrastructure has allowed a cholera epidemic to spread across Zimbabwe, claiming more than 2,100 lives, according to UN estimates.
Meanwhile chronic shortages of food are starting to bite again this year, as rural households' supplies from last year's harvest are running out months before the new crops will be ready.
The World Food Programme says five million people -- nearly half the population -- are dependent on food aid.
The crisis shows little sign of abating with government deadlocked after disputed elections last year. Mugabe and opposition leader Morgan Tsvangirai signed a power-sharing deal four months, which has yet to be implemented.
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