Zimbabwe introduces Z$50 banknotes to ease cash shortages

Zimbabwe will start circulating a new 50 Zimbabwe dollar note from Wednesday, central bank governor John Mangudya said, as authorities gradually introduce higher denominations in a country still haunted by memories of ruinous hyperinflation.

Mangudya said 360 million Zimbabwe dollars ($4.2 million) worth of new notes would be injected immediately into the banking system, making it easier for Zimbabweans to use cash in day-to-day transactions. Two of the new Z$50 notes would be roughly enough to buy a loaf of bread.

Zimbabwe reintroduced its own currency, the Zimbabwe dollar, in June 2019, ending a decade of dollarisation. The move sent inflation rocketing to as high as 837.53% by July last year, reviving memories of hyperinflation that wiped out the economy in 2008.

The government has since allowed the US dollar to circulate alongside the local unit, and inflation has come down to around 106 percent.

But the authorities have been loath to print bigger banknotes for fear of reawakening memories of the darkest days of the previous currency, when there were notes in circulation with a face value of Z$100 trillion.

The new Z$50 bank note is equivalent to $0.59 at the official exchange rate, or around $0.35 on the black market.

In May last year Z$10 and Z$20 notes were introduced but they have been eroded by inflation. Many Zimbabweans now conduct their transactions through mobile money, electronic cards or in US dollars.

Reuters