Zimbabwe will introduce a new Z$100 note imminently as the local currency continues its rapid exchange rate slide.
The new note is worth about US$0.68 cents at the official rate, but as little as US$0.30 cents on the widely-used parallel market – not enough to buy a loaf of bread.
Finance minister Mthuli Ncube made the announcement through a statutory instrument published Tuesday.
Reserve Bank governor John Mangudya immediately tried to calm fears the move would stoke inflation, which is already one of the highest in the world.
“It’s not going to cause inflation because we are not printing any new money. Individuals and businesses can only access cash based only on what they have in their bank accounts,” Mangudya said.
The Zimbabwe dollar was reintroduced in June 2019 after a decade of dollarisation, but Zimbabweans shun it if they can help it. The currency has slid in value against the United States dollar. At the official foreign exchange auction on Tuesday, one United States dollar was trading for Z$145 – and double that on the thriving parallel market.
Citizens Coalition for Change deputy leader and former finance minister Tendai Biti, speaking in parliament on Wednesday, told the government to abandon the currency.
“The cost of basic commodities like cooking oil, bread, milk and rentals is rising. Equally, the consumer basket has now gone up. For a family of six, it is now in excess of Z$120,000. Only yesterday the official exchange rate was 145, but in shops the parallel market rate is now close to 300. Why don’t you not just dollarise?” the Harare East MP said.
Ncube said the new Z$100 note would be brown in colour.
“On the front side the dominant feature shall be the logo of the Reserve Bank of Zimbabwe (three balancing rocks), with the visually impaired recognition feature to the left, latent image showing the denomination, windowed security strip inscribed ‘RBZ’ with colour shift from red to green, watermark with highlighted inscription ‘RBZ’ and see-through of Zimbabwe bird looking to the left in perfect register,” he said.
“On the back side, there shall be an impression of Great Zimbabwe monument and the baobab tree, gold coloured iridescent band showing the denomination of the note and see-through of the Zimbabwe bird looking to the right.”
Zimbabwe introduced a Z$50 note in July last year, adding to the existing Z$20, Z$10, Z$5 and Z$2 which are now worthless and burdensome to carry.