3 Dec 2008

Zimbabwe introduces new banknotes as inflation soars

10:08 pm on 3 December 2008

Zimbabwe's central bank will introduce new higher denomination banknotes of up to 100 million Zimbabwe dollars, as it battles to contain hyperinflation, state media reported on Wednesday.

The Herald newspaper said the Reserve Bank of Zimbabwe had unveiled new Z$10 million, Z$50 million and Z$100 million notes that would go into circulation on Thursday.

The previously highest denomination was Z$1 million.

Bank withdrawal limits would also be raised, just days after soldiers, reportedly angry they could not draw cash from banks, turned on residents and currency dealers. The army blamed the violence on undisciplined soldiers.

The southern African country is in the midst of an economic meltdown, highlighted by the world's highest inflation, officially estimated at 231 million percent, although suspected to be much higher.

Unemployment is more than 80% and food, water and fuel is scarce.

The World Health Organisation says the death toll from a cholera outbreak has risen to nearly 500 due to broken water systems forcing people to drink contaminated water.

Critics blame the crisis on President Robert Mugabe's policies, and the situation has worsened amid a stalemate in power-sharing talks with the opposition Movement for Democratic Change over cabinet positions.

Zimbabwe's central bank has repeatedly lopped zeros off the currency in a failed attempt to rein in inflation.