Zimbabweans left stranded as Zimdollar rejection creates currency crisis

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THE Consumer Protection Commission together with the police and the Financial Intelligence Unit has launched a blitz on businesses refusing to accept the Zimdollar following the launch of a new currency last week.

But observers said the blitz was an “exercise in futility” after the central bank postponed the rollout of the new currency.

Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu last Friday introduced a new currency, Zimbabwe Gold (ZiG). The central bank said the new notes and coins would be rolled out on April 30.

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This has left citizens stranded as some shops refuse to accept the Zimdollar. Those that are accepting the Zimdollar are using ridiculous rates to convert it.

Consumer Protection Commission research and public affairs manager Kudakwashe Mudereri confirmed that they had received complaints from customers of unscrupulous businesses refusing to accept ZWL$ notes, in violation of government policy.

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“It is important to note that the ZWL$ remains legal tender and the country’s citizens have been given 21 days to change their ZWL$ notes and coins to ZiG,” Mudereri said, adding that: “The penalty is going to be heavy on those found violating Exchange Control Regulations by refusing to accept ZWL$ notes.”

Among those affected were consumers who were failing to buy Zesa tokens with the new local currency.

The Zimbabwe National Roads Administration was yesterday also refusing to accept the local currency at tollgates arguing that the government had banned the local currency.

The situation has been worsened by banks that have taken longer than expected to convert the ZWL$ balances to ZiG as fear swirled that the move could negatively impact the reception of the new currency.

A roll call by NewsDay last night showed that African Century, POSB, EmpowerBank, Stanbic Bank, O’mari MyCash and EcoCash had successfully completed the currency conversion.

Zimbabwe has 19 banks made up of 14 commercial banks, four building societies and one savings bank.

Notwithstanding the chaos, Zimbabwe’s sole national electronic funds switch and clearing house has set transaction limits. The person-to-person transaction limit has been set ZiG2 400. The monthly transaction limit is ZiG8 000.

National Consumer Rights Association spokesperson Effie Ncube described the introduction of ZiG as chaotic, adding that it would kill confidence in the currency.

“Order is critical for market confidence which will decide the value of the new currency. Having introduced different currencies on five or so occasions in the past two decades, this time around the RBZ needed to be more efficient and upfront with all the information,” Ncube said last night.

“That we have unanswered questions days after the introduction of the new currency should have been avoided. The process should be decisive and emphatic in all stages.

“People want to know what is different now and what is there to prevent the same outcomes as was the case with previous currencies since 2000.”

A banker last night said what RBZ had done was unprecedented and worked against the adoption of a local currency.

“The Zimdollar has been discarded and there is a gap in the market. You can’t go for 72 hours without a local currency and expect it to wave its magic wand. After a week, people will say the local currency is no longer necessary. If the economy has operated for three days without the financial sector, the message is clear: The economy has informalised,” the banker said.

An economist with a leading financial institution said the failure by most banks to convert ZWL$ balances to ZiG and the postponed rollout of the new currency will suck out the confidence that had been garnered after Mushayavanhu declared that he would stick to his core business and would not entertain interference from any quarter.

“It was easier to score than to miss. Unfortunately, Mushayavanhu has blew that chance. Whether it will present itself again, no one knows,” the economist said.

Amalgamated Rural Teachers Union of Zimbabwe president Obert Masaraure yesterday said the introduction of ZiG currency was meant to punish the poor who had no access to US dollars.

“There is a transitional period, but government departments and agencies are not accepting the ZWL$,” he said. NewsDay.


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