Posted on December 21, 2007

The $750,000 Note That Won’t Buy a Loaf of Bread

The Scotsman, December 21, 2007

ZIMBABWE’S tough-talking central bank chief Gideon Gono unveiled three new banknotes yesterday in the clearest sign yet that he is losing the battle against skyrocketing inflation.

In a live TV broadcast, Dr Gono said he was introducing a Z$250,000 note, a Z$500,000 note and a Z$750,000 note. None of them is enough to buy a single loaf of bread.

Zimbabwe’s currency is fast losing value as annual inflation hovers above 14,000 per cent. Officially, Z$750,000 is worth £12.50. But at this week’s widely-used parallel exchange rates, it is worth about 8p.

The new notes come less than five months after Dr Gono launched the Z$200,000 bill, now only enough to buy one hard-boiled sweet. The note will become obsolete on 31 December, the central bank chief said, announcing a raft of measures to clamp down on cash hoarders.

Many shops have stopped accepting cheques because the Zimbabwean dollar loses so much value in the five days it takes to clear a cheque.

“We need a Z$1 million note then we will not have to carry our money in big bags,” complained a shopper in a Spar supermarket.

Zimbabwe’s economy has been in free-fall since 2000, when war veterans began to invade white-owned farms. Up to four million Zimbabweans have left for greener pastures.