Zimbabwe issued three new denominations of banknotes on Wednesday, including a one-million-dollar note, as the impoverished country struggles to cope with runaway inflation. The Reserve Bank of Zimbabwe said the new 100,000-dollar, 500,000 dollar and one-million-dollar banknotes would be available immediately.
The move comes less than a month after the central bank introduced 50,000-dollar banknotes, hoping they would be large enough for Zimbabweans to afford the skyrocketing prices of basic goods. However, the 100,000 banknote is now worth only one US dollar on the widely-used parallel black market and is only half the amount needed to buy a loaf of bread. Twenty-four new currency denominations have been introduced in Zimbabwe this year alone.
Once described as a model economy and a regional breadbasket, Zimbabwe's economy has collapsed over the past decade and there are now shortages of basic foodstuffs like sugar and cooking oil. When central bank chief Gideon Gono was appointed in November 2003, inflation was 619.50 percent but as of July, annual inflation hit 213 million percent.
The southern African nation is also suffering from foreign exchange and fuel shortages and the majority of the population live below the poverty line. President Robert Mugabe's government blames the country's economic meltdown on sanctions imposed by Britain and other Western nations, while critics fault Mugabe's chaotic land reform programme as one of the main causes.
To keep pace with the rising costs, shops sometimes change the prices of goods more than twice a day while long meandering queues have become a familiar sight at banks as depositors seek to withdraw cash which is rapidly losing its value. While the currency, once on a par with the British pound, is in freefall, unemployment is a staggering 80 percent. The government has tried several measures - including price controls and even striking off 10 zeros from the country's currency - to try to rein in the galloping inflation.
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