Thursday, July 9, 2020

Bond notes spark fears of hyperinflation in Zimbabwe

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Isaac Kaledzi is an experienced and award winning journalist from Ghana. He has worked for several media brands both in Ghana and on the International scene. Isaac Kaledzi is currently serving as an African Correspondent for DW.
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As Zimbabwe edges closer to introduce bond notes, citizens in the country fear that the government will create a devastating crisis.

The government plans to introduce the notes in November, in a move to curb a persistent liquidity crunch.

The token currency will trade at par with the US dollar, starting with small denominations of $2 and $5.

The governor of Zimbabwe’s Reserve Bank John Mangudya insists that the controversial bond notes help will curb inflation in the country.

He further added that this was a just a short -term measure, but investors seem unconvinced as data cited from the Central Bank indicates there has been investor flight with nearly 5,000 companies shutting operations over the last three years.

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Zimbabweans have also been lining up outside banks in panic as they try to get hold of the few remaining US dollars.

The southern Africa country has used the US dollar since 2009, after the government flooded the market with worthless Zimbabwean dollars which sparked hyperinflation to 500 billion percent, and the national currency was abandoned.

Civil society groups, the opposition have mobilised citizens to stage demonstrations against bond notes amid fears that the programme is an attempt by the government to re-introduce the local currency.

 

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Source: Africanews

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