50 billion dollars for bread

50 billion dollars for bread

HARARE, July 3 (Reuters) – Zimbabwe’s central bank said on Thursday the cancellation of a contract by a German firm to supply Zimbabwean banknote paper will not hit business, state media reported.
The country is struggling with a chronic shortage of cash and hyper inflation. The last official rate — for February — was 165,000 percent but analysts say it is really about 9 million percent.
The central bank has been printing higher denomination banknotes to keep pace and the most valuable bank note currently in circulation is worth Z$50 billion, enough to buy three loaves of bread.
Giesecke and Devrient announced earlier this week it would stop deliveries of the banknote paper to Zimbabwe following pressure from the German government, European Union and United Nations amid international criticism of President Robert Mugabe’s widely condemned re-election.
“The banking and transacting public should go about their business in the usual manner, as the above-mentioned development will not have any impact to the economy,” central bank Governor Gideon Gono told the Herald newspaper.
Mugabe won a one-candidate run-off poll at the weekend after opposition leader Morgan Tsvangirai withdrew citing violence and intimidation.
Gono said the government made alternative plans before the German firm, which supplied Zimbabwe with the special paper for 40 years, announced the decision. He did not give details.
The central bank would “innovate and try to plough around all obstacles placed in its way”, he said, although did not say how and where the country would source material to print money.

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