Zimbabwe’s Reserve bank has announced it will introduce bond coins to complement the United States dollar which is in short supply thereby creating a cash crisis.
The United States dollar which was introduced in 2009 along with South African rand and Botswana pula as a measure to resuscitate the economy which had suffered hyper inflation and the local currency, the Zimbabwe dollar being rendered useless and valueless. The multi-currency regime brought relief to the ailing economy which was on a downward spiral with local industries shutting down and shortages of goods in the supermarkets.
The cash shortage which started in April this year has forced the RBZ governor John Mangudya to resort to introducing bond notes as a mitigatory measure. However the move has been interpreted as a way to bring the Zimbabwean dollar back into the market and has set a panic mode across the nation. Since the announcement of the coming of the bond notes, the banks have suffered huge cash withdrawals with people opting to have their money at home amid fears it will be converted to the Zimbabwe dollar.
Local economic analysts have castigated the monetary authorities and have called on them to reconsider the move as this will only create more problems than already existing. Speaking to journalists economic analysts have blasted the Reserve bank chiefs and argued that the move will only worsen the delicate situation as people will panic and withdraw all the money thereby drying up the little cash that was in circulation and crippling the economy further.
The current economic challenges in Zimbabwe has largely been contributed by the imbalances between the exports and imports with the country importing more than it exports. This always result in the cash outflows being higher than the cash inflows thereby creating a crisis. Zimbabwe has become a consuming nation relying heavily on South African industry.
Back then in 2009 when the local currency was removed from the system, many people lost their money so any announcement of the return of the currency will most likely cause serious panic.
However the RBZ governor is adamant that the this is not the return of the local currency and that the multi-currency regime will stay in place. Many people have started taking advantage of the current cash crisis by hoarding cash and sell it to desperate people.