26 December 2007

HARARE (Reuters) - Zimbabwe police have launched a manhunt for a senior official in President Robert Mugabe's ruling ZANU-PF party in connection with an investigation into illegal foreign currency deals, police said on Monday.

Police spokesman Wayne Bvudzijena told Reuters detectives want to interview David Butau, a businessman and ZANU-PF member of parliament from Mashonaland Central province, an area which has traditionally shown solid support for Mugabe.

State radio also broadcast frequent appeals for Butau to turn himself in. "We want to question him in connection with a case involving the externalisation of foreign currency," Bvudzijena said. "We just want to seek clarification and it's urgent that we talk to him, but we can't find him."

Central bank governor Gideon Gono has accused officials in Mugabe's party and government of fueling black market trading of foreign currency, which is in short supply as a result of a deep economic crisis in the southern African nation.

Inflation has skyrocketed to almost 8,000 percent.

Gono said officials, working with some businesses, were also behind the serious cash shortages that have seen thousands of consumers besiege banks ahead of the Christmas holidays.

The central bank last week introduced Z$750,000 (about $6 at the official exchange rate but just $0.12 on the black market), Z$500,000 and Z$250,000 notes to ease the shortage. The highest banknote still cannot buy a loaf of bread, which costs between Z$800,000 and Z$1 million.