Zimbabwe has announced the introduction of two higher denomination banknotes in a bid to ease cash widespread shortages.
Finance Minister Mthuli Ncube this week gazetted the introduction into circulation of new Z$10 and Z$20 notes. Currently the highest denomination is the Z$5 note.
No date has been given for when the notes will enter circulation. A bank manager in Harare said “nothing formal yet” has been communicated from the central bank.
On the sidelines of the 2020 World Economic Forum in Davos early this year, Ncube said higher denomination notes would make it easier for citizens to transact.
The introduction comes at a time that Zimbabwe is experiencing hyperinflation, which reached 676% in March. It will takes more than the combined buying power of both the new Z$10 and Z$20 notes to buy a loaf of bread, which costs just over Z$30 in most outlets.
Cash shortages have triggered long queues at banks and an illegal market where premiums of up to 40% are charged to convert electronic money into cash.
In addition, cash shortages have led to the creation of a multi-tier pricing system, where prices of a single product differ depending on the customer’s mode of payment.