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Archive for Friday, December 21, 2007

Lines form outside banks for new denominations

December 21, 2007

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— Zimbabwe's central bank unveiled new currency notes Thursday with denominations as high as 750,000 dollars as the government tries to ease chronic shortages of cash in a hyperinflationary economy.

Official inflation is 8,000 percent although independent estimates put it higher. The International Monetary Fund forecast inflation would reach 100,000 percent by the end of the year.

The government is withdrawing all 200,000-dollar notes, currently the largest currency note, and will question those attempting to exchange them to root out "cash barons" who hoarded them for illegal deals, Gideon Gono, governor of the Reserve Bank, told the state broadcaster.

The 200,000-dollar note is expected to be phased out by Jan. 1. People exchanging large sums of 200,000-dollar notes will be asked to explain how they were acquired or face forfeiture and criminal charges.

Lines that have formed daily this month outside banks and automated teller machines grew even longer Thursday after Gono said the central bank was pumping new 250,000, 500,000 and 750,000 Zimbabwe dollar bills into the economy ahead of the holidays.

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