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Zimbabwe Currency: Citizens Uninspired by New Money

Harare - Instead of celebrating the unveiling of a new currency, most Zimbabweans feel the new which will start circulating today will not ...

Harare - Instead of celebrating the unveiling of a new currency, most Zimbabweans feel the new which will start circulating today will not change anything as long as government has not implemented economic and political reforms to generate market confidence.

The Reserve Bank of Zimbabwe (RBZ) is today introducing $5 and $2 notes, as well as the $2 bond coin as part of measures to ease cash shortages and bring back the local currency, which was scrapped in 2009 and replaced by a multi-currency regime.

The new notes look exactly the same as the old bond notes with added security features, while the $2 bond coin looks like the $1 bond coin already in circulation.

But Garikai Mbudaya, a Warren Park resident, said although the new notes would increase liquidity, it would likely increase inflation like it used to happen during the hyperinflationary era under former RBZ governor Gideon Gono.

“This will not change anything much because as long as there is no confidence in the government, there will be hardly any change in the market,” Mbudaya said.

“The biggest losers will, however, be the EcoCash agents who had been selling money at a premium. The new currency will push the premium down a bit, but not for long.”
New Zimbabwe Currency 

Commenting on the similarity of the new notes to the bond notes already in circulation, Mbudaya said that was the manifestation of the confusion in President Emmerson Mnangagwa’s government.

He said whether by design or accident, the similarities on the new and old currency would not help inspire confidence, describing the new money as a packet of hot air to replace a bottle of the same.

Joseph Mlambo, a Bikita resident, said the currency being introduced today would hardly change anything as far as the country’s economic situation is concerned.

“The new currency, which will not have market confidence, is not what the economy needs, therefore, it cannot be a solution,” the 23-year-old Mlambo said.

“Since the currency will be almost identical to the bonds that are already in circulation, it won’t induce a mental difference to the currency users. So this implies that the currency will as well suffer from the ongoing wave of inflation.”

A resident of Harare’s Epworth satellite town, Vivian Mwayera, said she does not care whether the country introduces new money today or tomorrow, she only wants Mnangagwa to fix the economy.

“We are suffering. We will not eat the new money. We want the President to address the economy first and then introduce the new money. We were good under the US dollar regime than now,” Mwayera said.

Political analyst Ernest Mudzengi said Zimbabwe does not need a new currency, but economic and political reforms to boost confidence.

“We need the economy to produce, agriculture and manufacturing sectors must produce so that we can export. Printing of money will not help, it is not a panacea, and we need economic and political reforms and address the issue of confidence. Things like the land issue of land should be addressed once and for all,” he said.

Mudzengi said the similarities and differences of the new money would be inconsequential. An economist, who refused to be named because his company does not allow him to speak to the media, said:

“The new currency will not survive simply because it is not backed by anything, apart from policies from an untrusted government. It will not survive. The denomination is too small for the prices in the country. The biggest note is $5 and yet bread costs $15.”

In 2016, the RBZ introduced bond notes whose value was at par with the US dollar until October last year when the currency reforms started. Since then, the government has issued a number of statutory instruments as it navigates the transition from a multi-currency system to the mono-currency regime.

Meanwhile, the RBZ has began dispensing notes and coins to all banks across the country, RBZ Governor Dr John Mangudya said this afternoon.

Dr Mangudya said the central bank started the cash distributions in the morning today with virtually all the banks expected to have received allocations, especially those that were not able to be served in the morning today, by tomorrow morning.

The central bank chief said banks were in the process of collecting the cash made up of the new $2 bond coins as well as the banknotes comprising denominations of $2 and $5 notes of the Zimbabwe dollar that was reintroduced in June this year.

However, he noted that the injection of new notes and coins to address the acute shortages that have seen people being charged steep premiums to get cash, will be gradually on a drip-feed basis. - Online Sources 

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