Zimbabwe

New bank notes fight inflation

Article published on the 2008-07-30 Latest update 2008-07-31 17:14 TU

Robert Mugabe
(Photo: AFP)

Zimbabwe is to issue new bank notes, with ten zeros removed from current currency value, to try and curb the effects of hyperinflation. Economists currently estimate inflation in the country at ten million per cent. On 1 August, the ten billion dollar note will disappear in Zimbabwe, and become one zimdollar in Harare's latest attempt to fight the effects of hyperinflation.

Last week, the country issued the historic 100 billion dollar note, to try and tackle desperate cash shortages. The note doesn't buy a loaf of bread in Harare today.

"People you know, they are not earning a lot of money. So even if they change the note, it will remain the same," Tanya (not her real name) a resident of Harare, told RFI.

"We don't have food. You can't even find bread, cooking oil, sugar. We're talking about the basics," she added.

 Inflation first passed the 1,000 per cent threshold in May 2006 and has been rising almost continuously ever since. Following the re-election of President Robert Mugabe in June, the inflation rate, already the highest in the world, hit 2.2 million per cent. Economists say that this figure has been surpassed by a long way in the meantime.

"They're unable to access the actual currency to conduct normal day-to-day transactions like going to the shops and so on. So that will make a bigger difference from that viewpoint," Tony Hawkins, an economist in Harare told RFI.

 The government has tried a series of measures to curb inflation, including ordering shops and businesses to cut the price of goods last year.

 "We used to be the breadbasket of Africa and the only thing that's really changed is that a lot of our democracy has gone out the window, so those who are meant to be producing are unable to do so for political reasons," said Deon Theron, a farmer and vice president of the Commerical Farm Union in Zimbabwe.

 President Robert Mugabe has blamed economic sanctions imposed by the west for Zimbabwe's economic problems, and warned on Wednesday that he could impose tough emergency measures against businesses he accused of profiteering and fuelling inflation.