Banks in Zimbabwe are no longer distributing bills smaller than $10,000 through their automated teller machines, which some observers are taking as a sign the Reserve Bank of Zimbabwe might have to lop more zeroes off the currency this year. The Z$10,000 note is worth US$2 on the parallel foreign exchange market.The central bank trimmed three zeroes off the currency on July 31, 2006, in what the monetary authority called Operation Sunrise, then called in all old bank notes in a chaotic process in which police arbitrarily seized sums deemed to be ill-gotten. But the so-called bearer notes issued during and after that currency overhaul quickly lost their value as the exchange rate on the parallel currency market gravitated to around Z$5,000 per U.S. dollar while the official rate has remained at Z$250.
Bankers said that with inflation approaching 1,600% it makes no sense to load ATMs with small-denomination bills. Soaring inflation is also putting pressure on Reserve Bank Governor Gideon Gono to delay the introduction of a new currency. Reserve Bank sources said new notes were printed by the German firm Giesecke & Devrient in July and were intended to be introduced some time this month.