Image: Zimbabwe bank customers in line
AP
Customers wait in line outside a bank in Harare, Zimbabwe, on Friday. The nation's daily withdrawal limit and the fact that Zimbabwe has the highest inflation rate in the world — officially at 11 million percent — has meant long lines at banks most days.
updated 9/29/2008 1:36:27 PM ET 2008-09-29T17:36:27

Banking authorities raised the daily withdrawal limit in Zimbabwe on Monday, prompting tens of thousands to line up in desperate hopes of getting enough cash for groceries before spiraling inflation eats away more value.

New rules went into affect Monday allowing withdrawals of up to 20,000 Zimbabwe dollars (US$35). The old 1,000 Zimbabwean-dollar limit was barely enough to buy a newspaper.

The limit and the fact that Zimbabwe has the highest inflation rate in the world — officially at 11 million percent, unofficially much higher — has meant long lines at banks most days.

But Monday was extraordinary. Mothers with babies strapped to their backs arrived at bank doors at dawn. Police vainly tried to stop the crowds from blocking traffic — but there appeared to be more police and uniformed soldiers in the banking lines than on duty.

Street protests threatened
Lovemore Matombo, head of the Zimbabwe Congress of Trade Unions, said if politicians did not take action soon to ease the suffering of workers "we will go onto the streets."

He called for the limit on bank withdrawals to be removed altogether, but central bank officials say that could spark a run on banks that would ultimately worsen the cash shortages.

On Saturday, central bank governor Gideon Gono vowed to keep printing money, a practice critics say has fueled inflation.

As the lines disrupted traffic in Harare, the capital, President Robert Mugabe returned from a 10-day U.N. trip promising a new coalition government will be named soon. Getting the long-promised government up and running is seen as a first step to addressing the southern African nation's growing economic and humanitarian crisis.

But with his absence, a power sharing deal he signed with his longtime rivals in the opposition Movement for Democratic Change has stalled. The two sides have been unable to agree which party would control key Cabinet posts, among them the finance ministry.

Looking fit even at 84, Mugabe was greeted by about 1,500 singing, dancing well-wishers at the airport.

U.S. ambassador warned
"We never said there was a deadlock. But we will be setting up a government this week, towards the end of the week," he promised, warning U.S. ambassador James McGee, an outspoken critic, to stop "interfering" in domestic matters.

Mugabe's rival, Morgan Tsvangirai, who is to be prime minister in the unity government, said over the weekend a new power-sharing government must be formed within days to avert a humanitarian crisis.

Under the power-sharing deal, Mugabe's party gets 15 Cabinet seats and 16 go to Tsvangirai's opposition and a smaller breakaway opposition group led by Arthur Mutamabara.

Mugabe remains president and head of the Cabinet but as prime minister Tsvangirai heads a new council of ministers responsible for government policies.

Mugabe, in power since independence from Britain in 1980, blames Western sanctions for the country's economic collapse. But critics point to his 2000 order that commercial farms be seized from whites, which devastated the country's agriculture-based economy.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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