Protests as Zimbabwe issues 'zombie currency'
Robert Mugabe's government releases 'bond notes' pegged to US dollar in effort to ease currency shortage
Zimbabwe has released a new currency in a bid to ease crippling cash shortages throughout the country.
More than $10m (£8m) worth of "bond notes" have been released, with their value pegged one-to-one against the US dollar, which has been the official currency since 2009, following the collapse of the economy in 2008.
They are "intended to reduce a shortage of hard currency that has led to delays of several months in salary payments to civil servants, the military and some private company employees", Bloomberg says.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
However, Forbes contributor Tim Worstall says issuing notes rather than buying hard currency directly from the US "is a good indication that there isn't the one-to-one cash to back them".
The move has been met by protests. "Many Zimbabweans doubt the government's ability to manage the new bond note system, with some shops refusing to accept the currency," CNBC says.
Taxi driver Freddie Sango, who works in Harare, told Bloomberg locals would only use the notes "to pay fines and bribes to the police".
He added: "People are calling it 'zombie money' because it's risen from the death of the Zimbabwe dollar and will be about as useful."
Matthew Davies, the editor of the BBC's Africa Business Report, says the notes are something of a gamble for Robert Mugabe's government.
He added: "If the current experiment with bond notes even looks like taking a step backward to the hyperinflation of seven years ago, not only will the economy's very survival be in jeopardy, so too will the government's."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
The Christmas quiz 2024
From the magazine Test your grasp of current affairs and general knowledge with our quiz
By The Week UK Published
-
People of the year 2024
In the Spotlight Remember the people who hit the headlines this year?
By The Week UK Published
-
Crossword: December 25, 2024
The Week's daily crossword
By The Week Staff Published