The Dollar’s Future? – Zimbabwe introduces 10 billion dollar banknote

Zimbabwe’s central bank has introduced a 10 billion Zimbabwe dollar banknote, worth $20 on the black market, to try to ease desperate cash shortages, state-run media said on Friday.

 

Prices are doubling every day and food and fuel are in short supply in Zimbabwe. A cholera epidemic has killed more than 1,100 people and a deadlock between President Robert Mugabe and the opposition has put hopes of ending the crisis on hold.

Hyper-inflation has forced the central bank to continue to unveil new banknotes which quickly become almost worthless.

New Z$1 billion and Z$5 billion notes were also put into circulation and the monthly cash withdrawal limit was increased fivefold to Z$10 billion.

“The increase in cash withdrawal limits is set to go a long way in improving workers’ access to their money,” the Herald said.

But previous issues of new banknotes have done little to curb the cash crunch faced by Zimbabweans, who often line up for hours outside banks to withdraw barely enough to buy a loaf of bread.

Critics blame the economic meltdown on mismanagement by Mugabe’s government, including the seizure and redistribution of thousands of white-owned farms. The once thriving agricultural sector has fallen into ruin.

The veteran Zimbabwean leader, in power since independence from Britain in 1980, says Western sanctions are the main cause of the economic crisis.

Political analysts say the establishment of a unity government between Mugabe’s ZANU-PF party and the opposition Movement for Democratic Change is the best hope of reversing the economic slide and worsening humanitarian crisis.

But power-sharing talks have reached deadlock over the control of key ministries in the government. Tsvangirai accuses Mugabe of trying to assign the MDC a junior role.

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