Zim’s pseudo-currency blues
After crippling shortages of US dollars, the broke Zimbabwean govt has introduced a pseudo-currency
T HAS been a dramatic week for Zimbabweans following the launch of the country’s 2009. local currency since 2009, eliciting emotions of both hope and fear in one of Africa’s worstperforming economies. Named the “bond notes”, the pseudo-currency has sparked mixed reactions from a public that has suffered serious shortages of US dollars in the past six months. Desperate pensioners and rural folk have been sleeping in bank queues as the biting shortages spiralled out of control. While some citizens expressed hope the new currency would solve the cash crunch by injecting muchneeded liquidity into the troubled economy, others were fearful of the possible return of hyperinflation, which decimated the now-defunct Zimbabwe dollar seven years ago. On social media, bloggers complained that shop cashiers were giving them change in bonds, yet they had paid for goods in US dollars, which has been the main currency used in the country since The Reserve Bank of Zimbabwe has released the first tranche of 10 million bond notes, which it said are equivalent to $10 million. However, currency dealers on the streets of the capital Harare told African Independent the bond notes were inferior to the dollar and, therefore, cannot trade at par. On the day of the surrogate currency’s introduction, the wheeler-dealers were already offering an exchange rate of $1 to three bond notes. There was chaos when many shops, including major supermarkets, turned away shoppers intending to use bond notes. However, some of the outlets later began accepting the pseudocurrency. Tim Worstall, a fellow at the Adam Smith Institute in London, says the new bond notes show how badly President Robert Mugabe has destroyed Zimbabwe’s formerly thriving economy. Tellingly, the bond notes are being dispensed by banks to all and sundry and are circulating in the broader economy – contrary to the Reserve Bank’s emphasis that the surrogate currency is a 5 percent “export incentive”, strictly reserved for exporters. There has been no shortage of news since the parallel currency’s introduction. Two days before the official launch of the bond notes, pictures circulated on social media showing stashes of the new currency in a bank vault. There were also closeup pictures of the notes. Within hours, social media was abuzz with frenzied chatter, as people discussed the pictures. On launch day, the Reserve Bank issued a statement revealing the culprit behind what it described as a serious security breach. In a swift move, the central bank fined the People’s Own Savings Bank, a state-owned financial institution, $500 000 for the breach. The implicated employees, have been fired immediately. Zimbabweans have not made it a secret that they lack trust in the central bank and the government’s ability to resist the temptation to print billions of dollars’ worth of bond notes.
UNHAPPY: Protesters hold placards during a demonstration against the new bond notes