Zimbabwe running out of paper for worthless currency

Telegraph:

Giesecke and Devrient, based in Munich, said it would no longer deliver watermarked paper to President Robert Mugabe’s Reserve Bank. This was due to “the critical evaluation by the international community, German government and general public” of the political situation in Zimbabwe.

Facing an spiralling economic crisis, Mr Mugabe’s bankrupt regime must print money in order to pay its bills. This has sent inflation rising above two million per cent and wiped out the value of the Zimbabwe Dollar.

Today, the currency is not even issued in the form of a proper banknote. Instead, most bills are “bearer cheques”, marked with an expiry date. In practice, prices double every two or three days and the notes become worthless long before they officially expire. More recently, the Reserve Bank, which is issuing bills in ever-larger denominations, moved on to special “agro-cheques”, leading to wry comments about how much “aggro” people have to handle.

The highest value banknote is worth Z$50 billion - which is presently enough to buy one can of baked beans. At the TM supermarket in Harare’s northern suburb of Borrowdale, many shelves were bare yesterday. But a kilogramme of mince cost Z$490 billion and a kilogramme of sausage was going for Z$170 billion. A litre of imported orange juice cost an eye-watering Z$303 billion.

Some prices have trebled from a week ago, when toilet paper worked out at just under Z$22 million for a single sheet. There was none in the supermarket yesterday, but by now there is probably an alternative use for the Z$50 million note.

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There is more. The inflation story has fallen into the background as the horrendous abuse stories surfaced, but it clearly has not abated from lack of coverage. It is not clear how Zimbabwe has been able to afford to pay for the printing of this worthless currency, but running out of it may actually put a brake on inflation when there is no currency at all.