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Chaos at Zim banks
31/12/2007 16:43 - (SA)
Godfrey Marawanyika
Harare - Zimbabwe's central bank chief extended a deadline on Monday to exchange Z$200 000 bills just hours before they were to cease being legal tender after scenes of chaos at banks across the country.
In a press conference, Reserve Bank of Zimbabwe Governor Gideon Gono declined to set a new deadline and blamed recent heavy rains for hampering efforts to stock up banks with new higher denomination bills.
"The legal status of the Z$200 000 bearer cheque notes is now reinstated and extended to a future date which will be announced when it is deemed strategic to do so," Gono told reporters.
"All economic players are therefore advised and required to continue fully accepting the 200 000 bearer cheque note as it is a legitimate part of our legal tender."
Gono, one of veteran President Robert Mugabe's chief lieutenants, had announced two weeks ago that the Z$200 000 bills (about R54) would be worthless as of midnight on New Year's Eve as part of efforts to snuff out a burgeoning black market, and to tackle cash shortages.
Major queues were seen outside banks in central Harare long before opening time on Monday, with thousands of customers carrying small satchels of cash or wads of the expiring notes.
'Waste of time'
Many complained they were being forced to exchange notes they had withdrawn only days before.
"It's so frustrating because I was given these old banknotes when I made a withdrawal on Saturday and I am back here to deposit almost all of the money since many people are refusing to accept it," said Douglas Chimwasa, a Harare resident.
"You can imagine how much time I lost in the queue waiting to withdraw this money and now I will waste at least another hour returning it."
There were chaotic scenes outside the main branches of Barclays and Stanbic banks in Samora Machel Avneue, with customers trying to barge their way through the doors.
Many storekeepers decided simply to close shop for the day rather than risk being caught in the mess and accepting the outgoing notes.
Gono's statement on December 19 that the Z$200 000 bills were being phased out was also accompanied by the announcement that new Z$250 000, Z$500 000 and Z$750 000 notes were being immediately introduced.
However, many banks, particularly in rural areas, have not received deliveries of the new currency, since flooding is hampering the operation.
'Senseless' withdrawals
"Excessive wet conditions hampered cash swap teams' ability to effectively access most outlying areas," Gono said.
Harare-based independent economist Daniel Ndlela described as "senseless", the withdrawal of the Z$200 000 bills at a time when the official rate of inflation is nearly 8 000%.
"Under hyperinflation, any introduction of a new currency will not make a difference as the new denomination loses value within days," Ndlela said.
He attributed the cash shortages to waning confidence in the banking system and a deliberate withholding of cash by the central bank.
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