No more banknote paper for Zim Reserve Bank

 1 July - The Reserve Bank of Zimbabwe, which has been a big spender of banknote paper due to the country's extreme inflation and constant need to print new and bigger banknotes, will not be provided with more paper from today. This was announced by the Bank's German supplier, which has given into Berlin boycott calls.

The Munich-based company Giesecke & Devrient GmbH today decided “to cease delivering banknote paper to the Reserve Bank of Zimbabwe with immediate effect,” according to a statement forwarded to afrol News. The company says it has taken this step “in response to an official request from the German government and calls for international sanctions by the European Union and United Nations.”

“Our decision is a reaction to the political tension in Zimbabwe, which is mounting significantly rather than easing as expected, and takes account of the critical evaluation by the international community, German government and general public,” explains Karsten Ottenberg, Chairman of the Management Board and CEO of Giesecke & Devrient.

In delivering banknotes and banknote paper, the Bavarian company is subject to strict rules defined by the World Bank. The company in the statement says it continues to “rely on the political and moral assessment provided by international trade regulators.”

The latest update on Zimbabwe’s incredible inflation is that it has soared to an incomprehensive 9 million percent, rising 7.3 million percentage points from May to June. These are the figures from Zimbabwe government’s official statistics agency, the Central Statistical Office (CSO). The government however stopped issuing inflation statistics in February this year.

With this hyperinflation, Zimbabwean banknotes are losing value by the minute. The Reserve Bank of Zimbabwe thus has been forced to print new Zimbabwe dollar bills at a speedy paste, adding an extra zero on a regular basis. Within short time, however, banknotes get a lower value than the paper they are printed on, in a literary meaning.

With the cancellation of supplies of banknote paper from Germany, the Harare Reserve Bank will have to look for other suppliers that could ship cheaper paper of less quality to Zimbabwe; an option that seems logical as the risk of falsifications is closing into zero. Or the bank could stop printing Zimbabwe dollars, which also makes sense as the population is moving away from the non-trustable currency, rather trading in goods or foreign currencies.

According to the latest official figures, one US$ now trades more than 12.2 billion Zimbabwe dollars. On the black market, however, US dollars trade several times that rate.

Zimbabwean authorities recently have indicated that a redenomination of the Zimbabwe dollar is imminent. For that, however, new banknotes will have to be printed, and banknote paper will have to be bought. It is not likely that any foreign producer will accept a payment in Zimbabwe dollars for such paper.

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