HOW MUCH FOR A LOAF OF BREAD?
January 22, 2009
Zimbabwe's central bank will introduce a 100 trillion Zimbabwe dollar banknote, worth about US$33 on the black market, to try to ease desperate cash shortages, the state-run media said last week.
Prices are doubling every day, and food and fuel are in short supply. A cholera epidemic has killed more than 2,000 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 release new banknotes which quickly become almost worthless.
- There is an official exchange rate, but most Zimbabweans resort to the informal market for currency transactions.
- In addition to the Z$100 trillion dollar note, the Reserve Bank of Zimbabwe plans to launch Z$10 trillion, Z$20 trillion and Z$50 trillion notes.
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.
Source: Nelson Banya, "Zimbabwe to launch 100 trillion dollar note-report," Reuters, January 16, 2009.
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