Chaos as Zimbabwe demonetizes Z$200,000 note

HARARE, Dec 31, 2007 (AFP) – Zimbabwe’s central bank chief extended a deadline Monday to exchange 200,000 dollar bills just hours before they were to cease being legal tender after scenes of chaos at banks across the country. Last year, the central bank knocked three zeros from the country’s currency in a bid to rein in inflation but the central bank chief admitted earlier this month the zeros had returned. In a press conference, Reserve Bank of Zimbabwe Governor Gideon Gono declined to set a new deadline and blamed recent heavy rains for hampering efforts to stock up banks with new higher denomination bills.

“The legal status of the 200,000 dollar bearer cheque notes is now reinstated and extended to a future date which will be announced when it is deemed strategic to do so,” Gono told reporters.

“All economic players are therefore advised and required to continue fully accepting the 200,000 bearer cheque note as it is a legitimate part of our legal tender.”

Gono, one of veteran President Robert Mugabe’s chief lieutenants, had announced two weeks ago that the 200,000-dollar bills (about eight US dollars / 5.4 euros) would be worthless as of midnight on New Year’s Eve as part of efforts to snuff out a burgeoning