Zimbabweans are having a hard time handling their currency, literally. Due to stratospheric inflation, huge lumps of cash need to be carried around to perform daily transactions.
The purchase of a small trolley of groceries can require a brick of 250 or more ZIM$100,000 notes, if one is fortunate enough to obtain such notes, or two bricks of 500 notes if only ZIM$50,000 notes are available.
With inflation reaching an all-time of 1,193.5 percent in May, and only slipping slightly since then, Zimbabweâ€™s government is set to remove three digits from the local currency in an attempt to make transactions of goods and services more manageable, said the central bank on Monday, according to the Zimbabwe Independent.
Zimbabwe Reserve Bank governor Gideon Gono initially proposed a complete currency change, however a local accounting firm suggested the RBZ remove the last three zeros from the local currency. The government is currently involved in talks to reach a conclusion as to which solution is better.
Coins and low-denomination bank notes have no effective value and are meaningless as an exchange medium.
Considering the decision to drop three zeroes from the local currency, the RBZ will then take measures to introduce a kilo-dollar which will be the equivalent of the ZIM$1 000 that is currently in circulation.
The central bank first addressed the problem with the issue of ZIM$500 and, thereafter, ZIM$1,000 banknotes. However, the problem continued following the issue of bearer checks, first having values of ZIM$5,000 and ZIM$10,000, then ZIM$20,000, subsequently ZIM$50,000, and recently ZIM$100,000.
The on-going rise in inflation has resulted in an uncalculated supply of printed money, which is costing the government more to print than the actual monetary value of the note.
The figures are also causing problems with accounting programs on computers as it cannot process transactions or store processed data. Accurate financial information has also been compromised as most accounting systems are unable to capture large values.
Minister of Finance Herbert Murerwa will be considering the two proposals this week.