Zimbabwe's central bank will introduce a Z$100 trillion banknote, worth about €25 on the black market, to try to ease desperate cash shortages, state-run media said today.
Prices are doubling every day and food and fuel are in short supply. A cholera epidemic has killed more than 2,000 people and a deadlock between president Robert Mugabe and the opposition has put hopes of ending the crisis on hold.
Hyper-inflation has forced the central bank to continue to release new banknotes which quickly become almost worthless. There is an official exchange rate, but most Zimbabweans resort to the informal market for currency transactions.
In addition to the Z$100 trillion dollar note, the Reserve Bank of Zimbabwe plans to launch Z$10 trillion, Z$20 trillion and Z$50 trillion notes, the Heraldnewspaper reported.
"In a move meant to ensure that the public has access to their money from banks, the Reserve Bank of Zimbabwe has introduced a new family of banknotes which will gradually come into circulation, starting with the Z$10 trillion," the Heraldsaid, citing a statement from the central bank.
Previous issues of new banknotes have done little to curb the cash crunch faced by Zimbabweans, who often line up for hours outside banks to withdraw barely enough to buy a loaf of bread.
Critics blame the economic meltdown on mismanagement by Mr Mugabe's government, including the seizure and redistribution of thousands of white-owned farms. The once-thriving agricultural sector has fallen into ruin.
Mr Mugabe claims Western sanctions are the main cause of the economic crisis and worsening humanitarian picture.
Political analysts say the establishment of a unity government between Mr Mugabe's Zanu-PF party and the opposition Movement for Democratic Change (MDC) is the best hope of reversing the economic slide and worsening humanitarian crisis.
But power-sharing talks are deadlocked over the control of important government ministries. MDC leader Morgan Tsvangirai accuses Mr Mugabe of trying to assign the MDC a junior role and has demanded the release of detained opposition members before a deal is implemented.
The presidents of regional powers South Africa and Mozambique will meet political parties in Zimbabwe on Monday in a new regional push to break the impasse, South Africa's government said yesterday.