2 Aug 2008

Zimbabwe rolls out new bank notes as crisis bites

11:04 am on 2 August 2008

Zimbabwe rolled out a new set of banknotes and coins on Friday to ease the impact of a ravaging economic crisis.

The government of Robert Mugabe started replacing billions of dollars of currency in circulation as inflation spiralled out of control. Official inflation stands at 2.2 million percent, the world's highest.

Zimbabwe central bank Governor Gideon Gono on Wednesday announced that from 1 August the local currency would be re-denominated by removing 10 zeros from a Zimbabwe dollar. The highest note was 100 billion.

"Other than making it easier for us to count and to carry around, our problems have not gone away," said Lameck Chamunorwa as he left a bank after withdrawing $Z200 in new notes.

"It's like we are pretending that things are getting normal when the truth is that they are doing this (introducing the new currency) because we are in a bad state and far from normality," said the 28-year-old shop cleaner.

The new set of notes - from $Z1 to $Z500 - will circulate alongside the higher-denominated currency being phased until at the end of the year.

Long queues formed throughout the day as people sought to withdraw money from banks.

Zimbabwe's economic crisis has forced President Mugabe to negotiate with the main opposition Movement for Democratic Change in talks expected to usher in a government of national unity.

Critics accuse Mr Mugabe of destroying one of Africa's most promising economies with controversial policies, including his seizures of white-owned farms for redistribution to blacks, and see no hope for the country without a change in government.