A 50bn Zimbabwean dollar note was issued on Tuesday

Zimbabwe is introducing a Z$100 trillion note, currently worth about US$30 (£20), state media reports.

Other notes in trillion-dollar denominations of 10, 20 and 50 are also being released to help Zimbabweans cope with hyperinflation.

However, the dollarisation of the economy means that few products are available in the local currency.

On Thursday, the opposition leader said he was still committed to power-sharing intended to rescue the failing economy.

Since September, when the deal was signed, talks have stalled over who should control key ministries.

Movement for Democratic Change (MDC) leader Morgan Tsvangirai said he was due to hold talks with President Robert Mugabe "within this coming week" to try to resolve the political crisis.

The experience was frightening. I would not wish it upon anyone Jestina Mukoko on her abduction Zimbabwe Peace Project director

The latest annual figure for inflation, estimated in July last year, was 231m% - the world's highest.

"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," Zimbabwe's state-run Herald newspaper quotes a bank statement as saying.

But previous issues of new banknotes - and the dropping of several zeros from the currency - have done little to help Zimbabweans cope with inflation.

On Tuesday, a 50bn Zimbabwean dollar note was issued, less than a month after a Z$500m bill was released.

Correspondents say prices can double every day, and food and fuel - for those without US dollars - are in short supply.

Last month, the daily bank cash withdrawal limit - which at one stage was only enough for several loaves of bread - was abandoned.

However, most banks do not have enough cash to meet demand.

Some shops are licensed to sells goods in foreign currency but everyone from vegetable sellers to mobile phone service providers peg their prices to the US dollar.

Most groceries are brought in by Zimbabweans from neighbouring South Africa, Botswana or Zambia, further driving up prices.

There is more than 80% unemployment in the country and those with jobs find their salary is worthless unless they are paid in foreign currency.

Tears

Mr Tsvangirai is expected to return to Zimbabwe on Saturday after two months abroad.

At a press conference in Johannesburg, Mr Tsvangirai again appealed for prominent human rights activist Jestina Mukoko, who appeared in court on Thursday, and other such detainees, to be released.

Robert Mugabe has resisted growing calls for his resignation

"Those abducted and illegally detained must be released unconditionally if this agreement is to be consummated," Reuters news agency quotes Mr Tsvangirai as saying.

Ms Mukoko - director of the Zimbabwe Peace Project - denies charges of organising military training to topple President Mugabe.

She broke down in tears in court as she spoke about her ordeal when she was abducted from her home by armed security agents at the beginning of December.

She described how she was beaten on her feet during questioning.

"The experience was frightening. I would not wish it upon anyone," she said.

Under September's power-sharing agreement, Mr Tsvangirai is to become prime minister while Mr Mugabe remains as president.

But the deal faltered after the MDC accused Zanu-PF of keeping the most powerful ministries - including the one that controls the police - to itself.

As the political wrangling continued, Zimbabwe has been hit by a cholera epidemic that has claimed more than 2,000 lives, made worse by the collapse of the water, health and sanitation systems.

Mr Tsvangirai, and Western nations, accuse Mr Mugabe of not being sincere about power-sharing.

Mr Mugabe insists he welcomes the power-sharing deal, and has resisted growing international pressure to resign.

Zimbabwe Closes in on Record

 

By Kerry Rodgers, Bank Note Reporter March 16, 2009

Readers will be aware that hyperinflation has long been alive, well and thriving in Zimbabwe. Back in February 2007 the country became the first to hyperinflate in the 21st century when the monthly inflation rate achieved 50 percent. This is taken as the minimum rate to allow a country to qualify as a fully paid-up member of the hyperinflation club. It equates to 12,875 percent per year.

Promotion through the ranks has been rapid for Zimbabwe. Last October it achieved second place in the all-time hyperinflators' stakes when it nudged aside Yugoslavia's January 1994 monthly rate of a miserly 313,000,000 percent.

Sometime this year the country could become the new world champion. To take the number one spot, Zimbabwe must eclipse Hungary's stupendous achievement of July 1946. Then the monthly rate peaked at 13,000,000,000,000,000 percent with prices doubling every 15.6 hours.

On Friday, Jan. 16 The Reserve Bank of Zimbabwe (RBZ) marked the country's new international status by announcing plans to issue Z$10 trillion, Z$20 trillion and Z$50 trillion notes along with one for Z$100 trillion. At the time Z$100 trillion equated to about US$60.

As in the past the announced official intent was to introduce the new denominations gradually starting with the Z$10 trillion. However, such is the exponential growth of the country's inflation that the $100 trillion proved to be needed sooner rather than later.

The BBC noted wryly that a Z$50 billion note had been issued three days prior to the announcement on Tuesday, Jan. 13 and that was less than a month after release of a Z$500 million bill. Somewhere in the intervening days the RBZ had abandoned the daily bank cash withdrawal limit. It had become irrelevant. Not only was it barely sufficient for a few loaves of bread but most banks had long lacked sufficient cash float to meet the demand.

Then, on Feb. 3, the RBZ revalued the Z$100 trillion issue to ZN$100 by chopping 12 zeros from the Zimbabwe dollar. This added to the 10 zeros slashed back in August 2008. As on that earlier occasion, record keeping was having problems keeping abreast of the size of the numbers involved. The bank's governor, Gideon Gono, assured one and all that the move was meant to bring convenience to the public, and introduced six brand new currency denominations of one, five, 10, 20 50, 100 and 500 dollars with immediate effect. The three-week-old trillion dollar notes will cease to be legal tender on June 30.

The country has also adopted a multiple currency trading system - officially. Both the U.S. dollar and the South African rand now circulate alongside the ever-inflating Zimbabwean dollar with government blessing. For many months the two alternative currencies have been preferred for all cash transactions on the black market. But now essential civil servants are paid in both rather than the Zimbabwe dollar.

An excellent account of Zimbabwe's hyperinflation, including comparisons with other infamous currency crashes, is given by Steve H. Hanke, professor of Applied Economics at John Hopkins University. It is recommended to all those addicted to collecting hyperinflation monies.

Back on June 25 last year Hanke observed: "Zimbabwe is in the late stages of a classic hyperinflation - Inflation is galloping ahead as the supply of Zimbabwe dollars surges and the demand for them shrinks. Eventually, the currency will totally collapse as people simply refuse to accept it." In effect this has happened with the widespread use of the U.S. dollar and rand.

And in November, when the monthly rate raced past 80,000,000,000 percent, Hanke observed that all non-cash Zimbabwe dollar transactions had ceased and the Zimbabwe Stock Exchange had stopped trading. He hence declared the non-cash Zimbabwe dollar to be dead, i.e. no checks, no plastic money.

As a consequence, and with few goods in the shops to measure inflation on at a practical level, Hanke sees no point in trying to estimate, let alone calculate any inflation figure beyond this point. In an article in Forbes Asia of Dec. 22, he noted the annual rate, based on the 80 billion percent November monthly rate, would be 6.5 quindecillion novemdecillion, that's 65 followed by 107 zeros percent - or 98 percent a day if you prefer.

Nonetheless a lot of folks in Media Land continue to make estimates and display their skills with the names of really big numbers, prompting some derisive comments and observations.

When Gary Els, vice chairman of the Astronomical Society of Southern Africa, read a report in The Times of Feb. 4 that the annual inflation rate had passed, a conservative, five sextillion, or 5,000,000,000,000,000,000,000 percent, he realized that in size the rate will soon approximate the number of stars in the known universe.

In a blog, he calculates that if a Zimbabwe dollar is 0.1mm thick, such that a stack of 10,000 notes is 1 m high, then a pile in which one dollar corresponds with every percentage point of Zimbabwe's February five sextillion percent inflation, would reach from earth to the edge of our solar system. In fact Voyager 1, launched by NASA in 1977 and currently trundling along beyond the orbit of Pluto at 17 km/s, will not arrive at the top of that pile until 2025, by which stage it will have grown considerably higher. Goodness knows what it would stack up to using Hanke's estimation.

Whatever the real rate, Zimbabwe may soon become the new world champion. It could happen any day soon.