PANIC AS ZIMBABWE PREPARES NEW BANKNOTES

Zimbabwe’s tentative return to its own currency is getting a hostile reception from citizens, who fear a recurrence of the 500 billion percent inflation that plagued the southern African nation before it abandoned its dollar seven years ago.

The country will soon introduce so-called bond notes, pegged to parity with the U.S. dollar and beginning with denominations worth from $2 to $5, central bank Governor John Mangudya said on Wednesday. It’s an attempt to complement the range of foreign currencies used in the beleaguered economy since 2009, which have been in short supply following a collapse in exports.

James Sakupwanya, who sells items such as maize meal, tinned food and blankets from his shop in Mutare, southeast of Harare, isn’t buying it. Sakupwanya and Zimbabweans like him see the notes as a step back to the hated Zimbabwe dollar, which by the time of its demise was valued at 150 trillion to the greenback, according to the central bank.

“We will reject it,” Sakupwanya said. “They can legislate as much as they want, but it is their currency which they want to impose on us to manage the crisis they created.”

An earlier announcement of plans to introduce the currency sparked riots in Harare even after the government said the notes, which will be legal tender only in Zimbabwe, will be backed by a $200 million loan from a multilateral lender. Banks have limited cash withdrawals to prevent hoarding of dollars, used in 95 percent of all transactions in the country, while some shops reported they’re running short of essential goods.

Adding to the suspicion is uncertainty about who exactly will lend Zimbabwe the money to back the bond notes. Gift Simwaka, the African Export-Import Bank’s regional manager for southern Africa, declined to confirm whether the notes will be underwritten by the multi-lateral lender. Without a hard-cash foundation, the notes will be no different to so-called bearer checks, a temporary currency with denominations of as much as 100 trillion Zimbabwean dollars introduced at the height of hyperinflation in 2008, Sakupwanya said.

“They are forgetting that in 2008 we rejected their bearer checks, so what stops us from rejecting their bond notes,” he said.

To read the complete article, see:
New Zimbabwe Notes Stir Memory of 500,000,000,000% Inflation (www.bloomberg.com/news/articles/2016-10-21/new-zimbabwe-currency-stirs-memory-of-500-000-000-000-inflation)

... the economy is again in a tailspin and the country is in desperate need of a new solution. U.S. dollars are still the main currency, but they are in critically short supply.

A visible sign of the latest crisis is evident in the long, winding lines outside all banks and ATMs in the capital, Harare, where customers are desperate to withdraw cash. Audrey Munemo says she's been waiting since dawn.

"I have been here in the queue at the bank for about four hours, ever since morning, and the banks are saying they don't have money," she says. "I was just trying to withdraw all my money before these bond notes start circulating, because we don't know what these authorities are planning to do."

There have been increasing numbers of protests, in the streets and on social media, calling for Mugabe to go. His government is still struggling to pay government workers, and says the economic problems should be blamed on the West.

To read the complete article, see:
The U.S. Dollar Is Zimbabwe's Main Currency, And It's Disappearing Fast (www.npr.org/sections/parallels/2016/10/11/497487307/the-u-s-dollar-is-zimbabwes-main-currency-and-its-disapperaing-fast)

	NBS (coinbooks.org) Web