A 200,000 Zim Dollar Bill

HARARE, Zimbabwe August 1st: The central bank unveiled a new 200,000 Zimbabwe dollar note yesterday, double the face value of what had been the highest denomination bill in a country where bundles of notes are needed for the simplest transactions. The Reserve Bank said in a statement that circulation of the new bill was for "convenience" in business and individual transactions. The bill is worth $13 at the official exchange rate or $1 at the dominant illegal black market rate. With five bills a Zimbabwean millionaire can buy a handful of scarce food items.

Runaway inflation has led to bundles of bills being needed for routine purchases. Few businesses or even government departments, including the tax office, accept checks. They demand cash or same-day bank-to-bank transfers, for fear the value of the currency will plummet even further before checks can clear. Zimbabwe is in its worst economic crisis since independence from Britain in 1980, blamed largely on disruptions in the agriculture-based economy in the former regional breadbasket after the often violent seizures of thousands of white-owned commercial farms began in 2000. Last August, the central bank slashed three zeros from the currency and issued new notes, saying the old cash had become unmanageable and computerized accounting and regular electronic calculators were unable to cope with the number of digits in routine transactions. Since then, official inflation has trebled to 4,500 percent, the highest in the world. Independent finance houses estimate real inflation closer to 9,000 percent.

A government edict to slash all prices last month in a bid to curb inflation has left shelves across the country bare of cornmeal, meat, eggs, milk, and other staples. Acute gasoline shortages have crippled transport and commuter services. The price of gas has been slashed to half the cost of importing it.
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