A nice idea

3 02 2015

Towards the end of last year Zimbabwe was abuzz with the news that bond coins were going to be introduced. The news was not well received and, despite strong denial from the Reserve Bank, rumours abounded that it was an attempt by the government to reintroduce the Zimbabwe dollar. I had seen one or two but up until today had not actually received any as change.

Small change

Small change

Small change is in notoriously short supply in Zimbabwe. South African coins (2 RAND lower right) have been useful in that they are roughly 1/10 the value of a dollar (so the 2 RAND coin is valued at 20c) but obviously they have to be bought at least the face value plus some sort of commission. The bond coins, which are minted in South Africa, are pegged at equal to the US dollar though they have no value outside the country. They certainly cost less to produce than their face value. A nice idea and certainly preferable to receiving ball point pens or sweets as change which was the case. People receiving lots of coins, such as the mini bus drivers, can go and change the coins at the end of the day for paper money at a bank. Except, as Shelton tells me, most refuse to accept them.

Gauging the mood

12 09 2008

It was about 10 pm last night when I first heard it on BBC that a power sharing agreement had been brokered between the government and the opposition in Zimbabwe. The details are not to be released until Monday so I thought “Oh” and went to sleep. It’s headline news today and there is a fair bit of speculation but one thing is for certain; the inflation is continuing. We will just have to wait and see if Thabo Mbeki really has pulled off the coup of his presidency after years of dithering or it is yet another disappointment that we are so used to receiving.

This morning in the gym I asked Austin what he thought (he’s as big a cynic as I). He said that when heads start to roll, the first being the governor of the Reserve Bank, Gideon Gono, then things really are happening. Apparently he is the No. 1 target as far as the MDC are concerned. Having just come from my other barometer of public opinion (my bank) I can definitely say that Zimbabwe is not collectively holding it’s breath. We’ll just have to wait until Monday and the official announcement/ceremony.

The transfer rate (cash US dollars for a zim dollar transfer) on Friday last week was 6000:1. By Monday it was 16000:1 and yesterday I pushed my prices to the equivalent of 30000:1. The accountant on the farm where I stay estimated that some of the farm’s suppliers are using 80000:1. It seems that the Reserve Bank has taken note and is proposing licencing some retail and wholesale outlets to trade in hard currency. I don’t know the details but apparently they are not very attractive. The licence has to be bought in hard currency, tax paid in hard currency and the prices one is allowed to charge will be heavily regulated. They might find that there are not too many takers. Just about anywhere outside the supermarkets (which are not worth visiting anyway) are charging in US dollars as it is. Yes, it is illegal but it comes down to a simple choice; do you want the item/s? On Wednesday, desperate to get rid of some Zim dollars, I eventually changed with Chris for 550 to one US dollar. I’d got the money in the previous week at 200:1 and had been unable to change it; the Zim dollar is fast becoming useless for all transactions except paying wages (though there are still massive queues outside the banks to get it). The relief I felt despite the massive loss was almost physical – now I could do things! Yesterday I went and blew the lot on chemicals and fertilizers though it was not as much as I’d expected to get. The fertilizer had gone up 200% in real terms since I last bought some nine months ago.

I should clarify the curious currency trading arrangements. Because of the restrictions on drawing cash from the banks (500 Zim dollars a person/corporation a day = 1 US dollar) almost all foreign currency trading has gone to cash for a transfer. This has pushed the rate to the mind blowing figures mentioned above. Accordingly those with real money to sell are not interested in getting 500:1 when they could be getting about 30000:1. Cheques and transfers in Zim dollars CAN still be used to pay utility bills and a few other things so why not get some REALLY cheap money if you can! It has of course made my corporate bank account worthless though I still go through the motions of applying for wages withdrawals every week though they are taking at least a week to clear through the Reserve Bank due to the massive backlog!