Zimbabwe introduces 500 million dollar note

Updated: 2008-05-16 07:44

Zimbabwe's central bank introduced 500 million Zimbabwe dollar notes worth just $2 yesterday in the latest sign of spiralling hyperinflation, only a week after issuing the 250 million bill.

The new highest denomination note would buy about two loaves of bread.

The central bank also introduced special agricultural cheques in 5 billion, 25 billion and 50 billion Zimbabwe dollar denominations to facilitate payments to farmers during the current selling season.

Farmers normally have to carry huge stacks of bank notes after selling their produce to state agencies, while consumers often carry large piles of cash with them for simple daily transactions.

The country is currently in the middle of the tobacco and maize marketing season.

"The Reserve Bank of Zimbabwe is pleased to announce the introduction of special instruments to cater for the marketing needs of our farmers in the form of 'special agro cheques' whose lifespan will run through Dec 31 2008," the central bank said in a statement.

It said the cheques were freely tradable and would start circulating on Tuesday, while the new currency notes are available immediately.

Zimbabwe, which has the highest inflation rate in the world at around 165,000 percent, has been beset by long queues at banks as consumers seek banknotes to stock up on basic goods, the prices of which are constantly rising.

The Zimbabwe dollar, which had been officially pegged at 30,000 to the US dollar before exchange rules were relaxed recently, currently trades at about 250 million to the greenback.

Zimbabweans had hoped elections on March 29 could help put an end to the country's economic meltdown, which has also led to 80 percent unemployment, chronic food and fuel shortages, and a flood of refugees to neighboring states.

But the parliamentary election results have been disputed, and a run-off for the presidency has been delayed.

State media reported yesterday that election authorities had said the presidential runoff will be held by July 31.

The Herald newspaper reported that an official government notice, issued late Wednesday, announced a 90-day extension to the deadline for holding the runoff, beginning when the presidential results were released on May 2.

Agencies

(China Daily 05/16/2008 page12)