HomeBusiness DigestZimbabweans count losses after currency switch

Zimbabweans count losses after currency switch

ZIMBABWEANS on Tuesday counted their losses a day after a currency swap deadline that left many with wads of worthless old banknotes the government said had become a tool for black market trade.

Commercial banks and supermarkets in Harare turned away scores of clients atte

mpting to use old Zimbabwe dollars, whose value had collapsed thanks to the world’s highest inflation rate of 993,6%.

The Reserve Bank of Zimbabwe (RBZ) last month effectively devalued the Zimbabwe dollar by 60% against its US counterpart, lopping three zeros from the currency and ordering people to switch to redenominated banknotes by August 21.

The bank’s move was also aimed at a thriving foreign currency black market, which it said had channelled trillions of local dollars illegally to neighbouring countries.

But critics say the exercise also hit poor urban informal traders who preferred to keep their money at home in cash, and rural people without ready access to banks.

On Tuesday rights group Women of Zimbabwe Arise (Woza) said 165 of its members were still in police custody in the second city of Bulawayo after their arrest the previous day during a street protest over the currency reforms.

Those arrested were awaiting a court appearance on charges of holding a demonstration “likely to breach the peace”, said Woza spokeswoman Jenni Williams. The group included 26 juveniles and 13 mothers with infants who were temporarily freed overnight and ordered to return to the police station in the morning.

“They were protesting the way the exercise has been carried out including the harassment of people at roadblocks and also the fact that some retailers have taken advantage of the reforms to hike prices,” Williams told Reuters.

To enforce the currency changes, the government deployed armed police and youth brigades from President Robert Mugabe’s ruling Zanu PF party at roadblocks to search people for large amounts of cash — grounds for suspicion of black market trading.

Police spokesman Assistant Commissioner Wayne Bvudzijena could not immediately comment on the Woza arrests.

The state-controlled Chronicle newspaper said most banks in Bulawayo had opened as late as 7pm to try and clear long queues as residents made a last-minute dash to offload the old money, a number of them unsuccessfully.

The currency swap has forced thousands of Zimbabweans across the country on wild spending sprees despite an eight-year recession that has impoverished many, with shoppers preferring to amass anything from cattle to electrical gadgets rather than be stranded with piles of worthless paper. — Reuter.

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