Zimbabwe releases more bank notes, threatening a repeat recession

As Zimbabwe’s cash crisis worsens, the central bank will release $300-million worth of new bond notes in the next two weeks.

News 24 reported in July that Zimbabwe’s central bank had vowed not to release more than $200-million worth bond notes as central bank chief John Mangudya was fearful of fuelling the kind of hyper-inflation that forced Zimbabwe to ditch its currency in 2009.

To date, over $160-million have been released.

Zimbabwean authorities are now threatening to arrest business people who hoard bank notes for resale to Zimbabweans who can’t get them out of their bank accounts.

The state-run Sunday News quoted Mangudya saying that these notes, like the first $200-million released in November, are backed by a loan from the African Export-Import Bank.

Cash hoarders ‘will be arrested’

Meanwhile, police and anti-corruption officials have threatened to arrest bank tellers, supermarket managers and mobile money agents for “hoarding cash”, the paper said in a separate report.

“We know that this is a syndicate and we are going to round them all up”, said Phyllis Chikundura, spokesperson for the Zimbabwe Anti-Corruption Commission (ZACC).

“Our auditors and police are investigating and a lot of ground has been covered. The long arm of the law will soon descend on the criminals.”

Dollars act as ‘a gold standard’

The notes are paid out as an incentive to exporters like tobacco farmers, gold miners and to Zimbabweans who are sent hard currency from relatives abroad.

“As long as the facilities are there to bank bond notes it’s more like a gold standard, you issue an instrument that is backed by something so that it becomes convertible. We can’t just issue something out of a thumb suck”, Mangudya added.

The bond notes have done little to ease cash shortages. Massive queues are visible outside most banks each month-end as depositors struggle to withdraw cash.

The situation is forcing more and more Zimbabweans to turn to plastic money and electronic transactions.

Forex available on black market

Retailers say that they have to purchase scarce foreign currency on the black market to pay suppliers outside Zimbabwe’s borders.

Many Zimbabweans fear a rerun of Zimbabwe’s last economic crisis which peaked in 2008, when “bearer cheques” lost value rapidly and hyperinflation chased goods from shop shelves.— News24

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Suicide cases soar in Zimbabwe

The economic crisis in the country appears to be pushing people over the mental edge

OPINION| New UK work visa to exclude graduates from Africa

If graduates did not get their qualifications from the list of top 50 universities, 40 of which are in the US, France, China, Hong Kong, Australia, Germany, Canada and Japan, they will be excluded

Hackers infiltrate SA illicit financial flows conference with porn clip

The conference was attended by state agencies, blue- chip global and local non-governmental agencies and public accountability experts

OPINION| South African audiences want more authentic and accurate diversity...

The media has the power to shape perceptions, so television shows and movies can help shape a positive view of people who feel stereotyped
Advertising

press releases

Loading latest Press Releases…
×