Remarkable story on a central bank that cannot afford the paper to print more currency. In short, the story underscores the commercial foundations of civilization itself.
Harare (AP) - Zimbabwe lurched closer to economic collapse Friday as banks ran out of money, fuel and power shortages worsened, factories slowed production and pay phones were scrapped because calls have become too expensive for coins. The central bank was not able to print money because the heavily indebted government failed to give it enough hard currency to import special paper, ink and security seals, state radio reported Friday. Shortages of the largest denomination, the 500 Zimbabwe dollar bill, left banks without enough cash for regular withdrawals. A box of matches costs 15 Zimbabwe dollars, or two U.S. cents at the official exchange rate of 800 Zimbabwe dollars to the U.S. dollar. The black market rate is 1,400-1. “We have reached an extremely serious situation. If it continues like this, the economy will soon come to a complete standstill,” said James Jowa, chief economist at the independent Zimbabwe National Chamber of Commerce. Acute shortages of gasoline have worsened, with vehicles lined up outside empty gas stations for as long as three days. Some vehicles are abandoned by owners in what drivers call “hope” lines.
