New Zimbabwe Currency Gets Off to Rocky Start

Zimbabwe's cash shortage problem appears to be far from over, despite the government issuing $10 million worth of "bond notes" that officially trade on par with the U.S. dollar. The new currency has already lost some value against the greenback.

The female voice is an attendant at a gasoline station refusing to accept bond notes from a motorist. We don't know the security features of the new currency, she says; we are trying to clarify with the Reserve Bank of Zimbabwe, the RBZ.

Similar scenes of confusion and delay are happening across Zimbabwe as people try to obtain and use the new bond notes that the government introduced Monday.

In Harare, Mary Murwi says she waited in a bank line six hours Tuesday to withdraw cash.

"The pain we go through to get cash is too much. Even someone serving at Chikurubi Maximum Prison is better," said Murwi. "What have done to deserve this? I should be getting my money on time. I thought since it is second day after the introduction of bond notes I would get my money on time."

When Murwi got her cash, she found it was worth less than advertised.

"Monday, I went to buy foreign currency for my child going to South Africa. For 100 bond notes I got $70," she said. "So it means it will not be 50-50 against the U.S. dollar as we were told."

Zimbabwe has been relying on foreign currencies, mainly the U.S. dollar and South African rand, since abandoning its own worthless currency in 2009.

President Robert Mugabe's government introduced the bond notes despite warnings from economists that the new currency will fuel hyperinflation and worsen an economy that has struggled since the turn of the century. Political opposition and civic organizations say they are planning protests against the bond notes.

Not everyone is against the new currency.

A song composed by singer Stunner says the bond notes will ease cash shortages in Zimbabwe.

But the question remains - will that actually happen?

On Monday, economist Prosper Chitambara, with the Labor and Economic Development Research Institute of Zimbabwe, told VOA that the $200 million worth of bond notes the government plans to put into circulation would not ease the cash shortage, as the country requires much more.

Source: Voice of America.

Related Post