New currency to be introduced

Zimbabwe's Central Bank announced on 30 July 2008 that it will introduce a new currency on 1 August in an effort to battle the country's hyperinflation and cash shortage. The Zimbabwe dollar will be redenominated by a factor of one to 10, meaning that 10 zeros will be removed; 10 billion dollars will thus equal Z$1 on 1 August. The bank also announced that it will raise the daily amount that Zimbabweans can withdraw from their bank accounts; the previous limit was Z$100 billion, which was not enough to buy a loaf of bread. The high number of zeros in the old currency caused a massive cash shortage as the bank's computer system and automatic teller machines were unable to handle transactions in the billions and trillions. President Robert Mugabe also warned businesses that he would immediately institute a state of emergency if they attempt to profiteer. Zimbabwe's inflation rate officially stands at 2.2 million percent, but unofficial estimates have placed the figure much higher, at approximately 12.5 million percent. Inflation has forced the central bank to issue Z$100 million, Z$250 million, Z$500 million and Z$100 billion notes this year alone.