PH
Zimbabwe’s new gold-backed currency got off to a rocky start on Tuesday, with stores only accepting US dollars and frustrated Zimbabweans queuing for hours outside banks to withdraw their savings.
The ZiG — short for Zimbabwe Gold — began trading on Monday, only days after it was announced that it will replace the Zimbabwean dollar, which has plummeted in value over the last year, driving inflation through the roof.
However, many people in the country were unprepared for the transition.
On Tuesday, most banks took their systems offline to migrate to ZiG.
This resulted in enormous lines outside several banks in the capital Harare, with hundreds of customers waiting for hours to withdraw cash or access their savings.
“I spent the entire morning… waiting for the bank to be back online,” one grumpy account holder told AFP.
“No success. Stranded. They say they have no idea when they will be back online.”
– Worthless Overnight –
The currency transfer caused old banknotes, which were already of limited value, to become useless overnight.
Children in Kambuzuma, a Harare neighborhood, played in the streets with wads of cash.
Other notes were abandoned on the pavements of the central business center, with no one bothering to pick them up.
Getting hold of new ones proved impossible.
On Saturday, the central bank announced that they were still being printed and will be available only on April 30.
Some customers were left stranded when Harare public transport companies refused to accept Zimbabwean dollars, instead demanding a steep flat rate of $1 — double the regular local currency cost for short excursions.
“We are being shortchanged,” complained George Goliati, a commuter.
Due to a coin shortage, several establishments and street sellers accepted only greenbacks and gave out biscuits or candy as change.
Julius Muza, a shopkeeper in the capital, told AFP that he stopped accepting Zimbabwean dollars after seeing people come into his and other shops to “dump” the old banknotes.
The central bank hopes that the ZiG, which is backed by a basket of reserves including foreign currency and precious metals, primarily gold, will help stabilize the country’s faltering economy.
Over the last year, the Zimbabwean currency has lost nearly all of its value against the US dollar, resulting in skyrocketing inflation, which, despite reaching triple digits, remained at 55 percent in March.
Soaring costs have put additional strain on Zimbabwe’s 16 million people, who are already experiencing widespread poverty, high unemployment, and a severe drought caused by the El Nino weather trend.
