Zimbabwe Issues Banknotes for 1st Time in Decade

The Reserve Bank of Zimbabwe (RBZ) began printing low-value banknotes on Tuesday for the first time in 10 years to help end liquidity shortages.

Banks are scheduled to issue banknotes in denominations of 2 and 5 Zimbabwean dollars in addition to coins.

The RBZ has sent about ZWD 30 million in new banknotes to local banks. However, the rigid withdrawal limits of ZWD 300 ($19) per week mean that consumers continue to struggle to access cash to cover costs.

This year, Zimbabwe abolished the multi-currency system and reintroduced the Zimbabwean dollar nearly a decade after being excluded from trading due to hyperinflation.

Meantime, the printing of cash might further fuel hyperinflation that is now the second highest globally after Venezuela.

Zimbabwe has been hit by cash shortages for the past three years with most ATMs no longer working.

The  currency has suffered sharp losses since its re-issue in February to record 15.8742 per US dollar in Tuesday's trading, even after being pegged it to the greenback.

The RBZ plans to inject 1 billion Zimbabwean dollars into the economy over the next six months.

Zimbabwe is living its worst economic crisis in a decade, with inflation rising above 300%. The country is also observing shortages of foreign currency, fuel, electricity and basic commodities.

The country is in the grips of a currency crisis as the local unit ZWD, which was at once pegged at 1:1 with the US dollar, is now trading at 1:20.