Sydney Morning Herald
By Rochelle Mutton in Johannesburg
THE problem with Zimbabwean money is that in the hyper-inflated economy, notes have become worth less than the paper they’re printed on.
To try to keep up with runaway inflation, Zimbabwe’s central bank has released a new $Z50,000 note.
Word on the street is to spend it quickly. As the Zimbabwe dollar has been notoriously prone to counterfeit, the new $Z50,000 note – technically a cheaply printed “bearer’s cheque” – expires at year’s end.
But a use-by-date is hardly necessary, with the Reserve Bank governor warning that inflation will soon nudge 800 per cent.
Upon issue, the new note carried the buying power of only a loaf of bread, a kilogram of mealie (the staple maize meal), or about three eggs – none of which are in guaranteed supply. In Zimbabwe, $Z50,000 converts to about 40 Australian cents at the official exchange rate.
Featuring a gaudy, Monopoly-like print of the Victoria Falls, this latest complement to the Zimbabwe currency is fast being associated with “a plunging precipice”, in a light-hearted email doing the local rounds.
The Opposition legal affairs spokesman, David Coltart, said Zimbabwe needs a $Z5 million note.
“The rate inflation is going, it will be in need of replacement before it has even been distributed to all the banks throughout the country,” he said. “The new note buys an absolute maximum of five litres of fuel, sold at old prices, but as from late last week it probably would only buy between two and three litres.”
Zimbabwe is in the throes of economic hemorrhaging, with unemployment at about 80 per cent, power failures, chronic fuel shortages and about 4.3 million people reliant on international food aid this year.
The International Monetary Fund, which has been holding talks in Harare this month, has called for improvements in governance, liberalisation of currency exchange rates, strengthening of property rights and reform of inefficient, corrupt and dept-ridden state enterprise and government bodies.
Since white-owned farms were seized in 2000 – devastating the economy – the IMF has suspended all loan programs to Zimbabwe.