December 19, 2008 / 10:26 AM / in 10 years

Crisis-hit Zimbabwe unveils 10 billion dollar note

HARARE (Reuters) - Zimbabwe’s central bank has introduced a 10 billion Zimbabwe dollar banknote, worth $20 (13.35 pounds) on the black market, to try to ease desperate cash shortages, state-run media said on Friday.

Prices are doubling every day and food and fuel are in short supply in Zimbabwe. A cholera epidemic has killed over 1,100 people and 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.

New Z$1 billion and Z$5 billion notes were also put into circulation and the monthly cash withdrawal limit was increased fivefold to Z$10 billion.

“The increase in cash withdrawal limits is set to go a long way in improving workers’ access to their money,” the Herald said.

But 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 Mugabe’s government, including the seizure and redistribution of thousands of white-owned farms. The once thriving agricultural sector has fallen into ruin.

The veteran Zimbabwean leader, in power since independence from Britain in 1980, says Western sanctions are the main cause of the economic crisis and worsening humanitarian picture.

The death toll from the cholera epidemic has risen to 1,123 and 20,896 people have been infected with disease, which is usually easy to prevent and treat, the United Nations said on Friday. The death toll given on Thursday was 1,111.

Political analysts say the establishment of a unity government between Mugabe’s ZANU-PF party and the opposition Movement for Democratic Change is the best hope of reversing the economic slide and worsening humanitarian crisis.

But power-sharing talks have reached deadlock over the control of key ministries in the government. Tsvangirai accuses Mugabe of trying to assign the MDC a junior role.

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