Zimbabwe to introduce 100 bln dollar bank note

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Central bank Governor Gideon Gono announced on Wednesday that inflation had surpassed 2.2 million percent, though some economists put it much higher.

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In a notice in the official Herald newspaper on Saturday, Gono said the Reserve Bank of Zimbabwe would introduce 100 billion dollar special agro-cheques (notes), to help consumers who currently need to carry large wads of cash even for simple transactions.

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"This new $100 billion special agro-cheque will go into circulation on Monday," the notice said.

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The central bank has been printing higher denomination banknotes to keep pace with soaring prices. The most valuable bank note currently in circulation is worth Z$50 billion.

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Gono said he was also considering raising the amount of cash people could withdraw daily from their bank accounts. The central bank has imposed a withdrawal limit of Z$100 billion, but this is only enough for two trips on an urban commuter bus or two loaves of bread -- if one can find it.

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The Zimbabwe dollar, which had been officially pegged at 30,000 to the United States dollar before exchange rules were relaxed recently, now trades at about 800 million to the greenback.

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Besides struggling with shortages of basic goods and services, Zimbabweans also spend long hours in bank queues trying to withdraw their money.

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The central bank says the limits on cash withdrawals are designed to curtail a thriving black market in foreign exchange and basic commodities.

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The worsening economy could add to pressure on the ruling ZANU-PF party to make concessions to the opposition Movement for Democratic Change, which has refused to recognise Mugabe's overwhelming victory in a June 27 presidential run-off election.

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MDC leader Morgan Tsvangirai won the first round vote on March 29 but failed to get the absolute majority needed to avoid a second ballot. Tsvangirai pulled out of that poll, citing violence by pro-Mugabe militia.

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Two weeks ago a German firm, Giesecke and Devrient, stopped deliveries of banknote paper to Zimbabwe following pressure from the German government amid international criticism of Mugabe's widely condemned re-election. Gono said Zimbabwe had made alternative arrangements.