Zimbabwean traders reject new currency notes

A man holds bond notes released by the Reserve Bank Of Zimbabwe in Harare central business centre on November 28, 2016. Some traders were resisting Zimbabwe’s new currency notes that went into circulation on Monday. PHOTO | WILFRED KASEJE | AFP

What you need to know:

  • The bond notes were reportedly being rejected by people who were yet to acquaint themselves with their security features.
  • The bond notes that are at par with the US dollar, were being introduced to ease a debilitating cash shortage that began in December last year.
  • Traders accused Reserve Bank of Zimbabwe of ambushing them after the notes were introduced without any awareness campaigns.
  • Zimbabweans have been struggling to access their money from banks, forcing many to sleep in bank queues.

HARARE

Some traders were resisting Zimbabwe’s new currency notes that went into circulation on Monday, reports indicate.

The bond notes were reportedly being rejected by people who were yet to acquaint themselves with their security features.

The new local notes were issued on Monday for the first time since the country abandoned its inflation-ravaged currency seven years ago.

The bond notes that are at par with the US dollar, were being introduced to ease a debilitating cash shortage that began in December last year.

The Reserve Bank of Zimbabwe (RBZ) on Saturday said it had injected $10 million worth of bond notes in $2 denominations and $2 million in $1 bond coins into the banking system.

RBZ insisted the bond notes would not replace the multi-currency system that was introduced when Zimbabwe scrapped its dollar in 2009, but depositors remain sceptical of the government’s intentions.

According to media reports, traders accused RBZ of ambushing them after the notes were introduced without any awareness campaigns.

However, RBZ Governor John Mangudya defended the move saying it was the normal procedure. “There was no ambush at all,” he said.
“That’s the normal standard process of introducing new notes. Banks were advised on Sunday.”

SLEEP IN BANK QUEUES

The introduction of the bond notes did not bring immediate relief to depositors who were still enduring long queues at banks on Tuesday.

Banks were giving depositors $50 in bond notes and $50 in US dollars. RBZ had said depositors would be limited to withdrawals of $150 (Ksh15,000) per week.

Zimbabweans have been struggling to access their money from banks, forcing many to sleep in bank queues.

The introduction of the bond notes has been facing fierce opposition from Zimbabweans who fear that it is an attempt to re-introduce the local currency.

President Robert Mugabe’s government scrapped the Zimbabwe dollar after it was ravaged by inflation that peaked at 500 billion per cent.

Zimbabwe has experienced a number of cash shortages since the turn of the millennium, resulting in the closure of many banks. The worst cash crisis was between 2008 and 2009 leading to the death of the local currency.

Analysts say the southern African country cannot sustain its own currency owing to the collapse of the local economy.