Zimbabwe is experiencing serious shortage of dollars as citizens are forming long queues outside banks amid a cash shortage that has prompted the government to announce plans to print a local version of the US dollar and to limit withdrawals.
The government adopted US and South African currencies in 2009 after hyperinflation rendered the national currency unusable as the economy collapsed.A recent shortage of foreign notes led Reserve Bank Governor John Mangudya to unveil a raft of radical measures on Wednesday, including limiting withdrawals to $1,000 or 20,000 South African rand per day.
Mangudya said that the central bank would also print its own dollar-equivalent bond notes “which are currently at the design stage” to ease the cash crunch.“This is extremely damaging to the interests of everyone and very dangerous to the economy,” independent economist John Robertson said in Harare.“It won’t be long before this becomes another inflation story. People will refuse to be paid their wages in bond notes.“Shops will not accept them as they cannot be used to restock [from abroad]. I am hoping that the government can be talked out of it.”
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They will be backed by a $200-million support facility provided by Afreximbank (Africa Export-Import Bank), the government said. “This does not signal the reintroduction of the Zimbabwe currency,” Mangudya said. “The fundamentals are not yet right for its comeback. This is just a measure to curb illicit flows out of the country.”Economists blame the cash shortage on a trade deficit which saw the country’s import bills standing at $490m in the first quarter against $167m in exports.