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Page last updated at 11:36 GMT, Friday, 18 January 2008

Zimbabwe bank to issue $10m bill

By Peter Biles
BBC Southern Africa correspondent

Man holding the new banknotes
A multi-millionaire but the new notes don't buy much

Zimbabwe's central bank is to introduce new higher-denomination banknotes in an effort to ease the critical shortage of cash in the country.

Zimbabwe has been in economic decline for the past eight years, with annual inflation widely thought to be in excess of 50,000%.

The highest value note that will go into circulation on Friday is worth 10m Zimbabwean dollars.

But that is worth less than US$3.90 (2; 2.60 euros) on the black market.

The introduction of the new banknotes, or "bearer cheques" as they are officially called, is a further attempt to stabilise the Zimbabwean economy.

Hyperinflation

There have been long queues every day at banks as people have struggled to withdraw cash.

The government's only response is to print more money - and that is seen as the main reason for the hyperinflation.

There have been no official inflation figures published for the past three or four months.

Zimbabwe's Reserve Bank governor, Gideon Gono, has called on the business community not to increase prices every time new measures are taken to adjust the currency.

The new higher denomination bank notes are certain to cause more confusion and they may only bring short term relief.

In the meantime, many people have become dependent upon imported goods, there are still severe shortages of fuel and power supplies remain erratic.


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