RBZ introduces higher denomination bank notes

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By MacDonald Dzirutwe

ZIMBABWE'S central bank on Wednesday announced the introduction of higher denomination banknotes to help end a cash crunch that has seen people besiege banks.

Central bank governor Gideon Gono announced in a televised speech that the Z$200,000 bill -- currently the highest value note and equivalent to $6.66 at the official rate and $0.12 on the widely used black market -- would be phased out by Jan. 1.

Gono said higher-value Z$750,000, Z$500,000 and Z$250,000 bills would start circulating on Thursday in an attempt to end cash shortages that have forced some people to sleep outside banks in the hunt for cash amid a severe economic crisis blamed on President Robert Mugabe's policies.

Critics say the new banknotes will do little to address the causes of Zimbabwe's economic slide, which include the world's highest inflation rate, acute shortages of foreign currency, food and fuel, and unemployment of nearly 80 percent.

Gono said the Z$200,000 note was the most used by illegal dealers.

He said individual depositors would not be allowed to bank more than Z$50 million and any excess funds would be forfeited to the government. All banks would from Thursday be manned by government officials to monitor cash deposits.

"The cash shortages will be a thing of the past. Within the next few days there will be sufficient cash to go about our business," Gono said.

Tempers have been fraying more than usual in recent days as Zimbabweans have crowded into banks in search of cash, which is in short supply ahead of the Christmas holiday.

Gono said he had refused calls by the business sector to lop zeros off the Zimbabwe dollar to make life easier for shoppers, who now must carry piles of cash to make even simple purchases.

The Reserve Bank of Zimbabwe chief again accused senior government and business officials of being the brains behind a flourishing illegal parallel market in foreign currency, fuel, diamonds and gold.

Gono said the stringent deposit requirements would expose the "cash barons" and that there would be a "serious clean-up" of banks he accused of working with illegal dealers to siphon cash out of the banking system.

When challenged in an interview after his televised speech to name the officials involved in illegal activities, Gono said he would divulge the information to parliament if asked.

"I will be happy to name some of these cash barons before a parliamentary committee. If they (parliamentary committee) have got the guts, I will give them a full house." - Reuters

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