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Zimbabwe announced Thursday it will introduce next month "bond notes" equivalent to the US dollar, sparking fears of a return to the hyperinflation that wrecked the economy several years ago.

 

The country, led by authoritarian President Robert Mugabe, adopted the US dollar and South African rand in 2009 after inflation — which peaked at 231 million percent — rendered the local dollar worthless.

 

But Zimbabwe has run out of US dollar notes in recent months and hopes to ease the cash crunch by printing its own "bond notes" that will be valued in denominations of $2, $5, $10 and $20.

The plan immediately attracted criticism, with analysts saying the token currency would not hold its US dollar value and would be seen as a new version of the valueless local dollar.

 

"The bond notes will start to circulate by the end of October and will be at par with the US dollar," Reserve Bank of Zimbabwe governor John Mangudya said in Harare.

 

"We anticipate by the end of the year $75 million will be in the market."

 

With the government again printing its own money, many Zimbabweans fear a repeat of the excessive printing that led to hyperinflation.