The new notes will be called “bond notes” and are being introduced to remedy a shortage of US dollars that has seen the resurgence of bank queues and empty ATMs.
Zimbabwe’s central bank chief John Mangudya says the notes will “go a long way in increasing economic confidence within the economy.”
But with memories of the reckless printing of “bearer cheques” during the 2000-8 economic crisis that led to hyperinflation reaching an estimated 500 billion per cent, hardly anyone believes him.
Reacting to the move, spokesman Obert Gutu of the Movement for Democratic Change (MDC) party said on Twitter that the ruling Zanu-PF was now “broke beyond repair.” The Zimbabwe People’s First party, which is headed by the ousted vice president Joice Mujuru, said Mugabe’s government had “run out of ideas to fix the regressing economy.”
Cash shortages have peaked in Zimbabwe in the last three weeks, leading to bank queues and often-empty ATMs. Bank withdrawals have been severely limited to $60. Plastic money is used very little in the drought-hit southern African country, where around 70 per cent of the population lives in the rural areas.
Locals spoke of trying to empty their bank accounts by offering $20 US “payments” to bank clerks. Traders are already selling cash at a 10 per cent commission, reports say.
Trevor Ncube, the publisher of the Newsday paper, summarised the prevailing sense of panic when he tweeted: “Run on banks. Black market. Not nice at all.”
There were grim forecasts of a fresh flight of Zimbabweans across the border to South Africa, as happened during the 2000-8 economic crisis. Around two million Zimbabweans already live and work there. Zimbabwean writer @tumaloons said: “It breaks my heart that I might have to go back to SA. I love it so much here but how do you run an economy with funny money?”
The notes will be printed in the next two months in denominations of two, five, ten and 20.