KEY POINTS:
In Zimbabwe, where the highest note is Z$200,000, the central bank has decided it is not high enough.
Central bank governor Gideon Gono said the Z$200,000 bill - equivalent to $8.94 at the official rate - would be phased out by January 1.
Higher-value Z$750,000, Z$500,000 and Z$250,000 bills would start circulating today in an attempt to end cash shortages that have forced some people to sleep outside banks in the hunt for cash amid a severe economic crisis.
Critics say the new banknotes will do little to address the causes of Zimbabwe's economic slide, which include the world's highest inflation rate, acute shortages of foreign currency, food and fuel, and unemployment of nearly 80 per cent.
Gono said individual depositors would not be allowed to bank more than Z$50 million and any excess funds would be forfeited to the Government. All banks would from today be manned by government officials to monitor cash deposits.
"The cash shortages will be a thing of the past. Within the next few days there will be sufficient cash to go about our business," Gono said.
Tempers have been fraying more than usual as Zimbabweans have crowded into banks in search of cash, which is in short supply before the Christmas holiday.
Gono said he had refused calls by the business sector to lop zeros off the Zimbabwe dollar to make life easier for shoppers, who now must carry piles of cash to make even simple purchases.
Gono again accused senior government and business officials of being the brains behind a flourishing illegal parallel market in foreign currency, fuel, diamonds and gold.
He said the stringent deposit requirements would expose the "cash barons" and that there would be a "serious clean-up" of banks he accused of working with illegal dealers to siphon cash out of the system.
- REUTERS
