Mugabe says 'surrogate currency' will prevent dollar outflow

Zimbabwean President Robert Mugabe said on Thursday the introduction of local bank notes by the central bank later this year, which he called a "surrogate currency", would help prevent foreigners taking greenbacks out of the country. He also said the shortage of US dollars in the economy would be overcome soon, although he did not elaborate.
In the grip of its worst drought in a quarter century that has left 4 million people facing food shortages, the southern African nation is also running out of cash, forcing the central bank to impose limits on imports and withdrawals from banks. But Zimbabweans are worried that the central bank's plan to introduce banknotes, or "bond notes", in October to ease the dollar shortage could open the door to rampant money printing, as happened in 2008 when inflation hit 500 billion percent, wiping out people's savings and pensions. Since January 2009 the country has used foreign currencies including the US dollar, British pound and Chinese yuan after dumping its own currency that had come to symbolise a decade of economic collapse.