Of Coffee With Death Of The Multi-Currency

If you were having coffee with me, I would be glad you stopped here to check up on dear old me, you ask me why I seem so pensive. I would tell you its been a long week today, well its one of those days you something and think someone wake me up from this nightmare…

Our metal puppets dancing to the strings soft as wool pulled by an unseen hand hiding in the shadows?

If you were having coffee with me I would tell you today I woke up to some *insert necessary adjective here* “news” that Statutory Instrument 142 of 2019 had been issued and with effect from the 24th of June 2019; Zimbabwe wold stop being a multi currency state, and have the Zimbabwean Dollar as the sole currency for legal tender.

Statutory Instrument 142 of 2019

When this regulation first made an appearance today, it was hard to figure out if it was fake news or not as there had been no warning or an official communication until later during the day when it made the news bulletins on radio, TV, print and electronic media.

if you were having coffee with me, I would tell you how on my evening commute home, everyone was still trying to figure out, the implications of this statutory instrument some arguing it would not work others wanting to give it a chance

Incase you are wondering why this is all such a big deal; its because at some point in our history around 2008 we lived through a hyper-inflationary era that saw the Zimbabwean dollar devalue spectacularly until we eventually “dollarised” and the Zim Dollar devalued at about USD$5 to 5 quadrillion zim dollars as we adopted a multi-currency system

Ten Trillion Dollars

Using forex as a currency has its drawbacks and that led to the creation of the surrogate bond currency that was meant to trade with United States Dollar at a value of 1:1

If you were having coffee with me,I would tell you that the government tried to keep the value at 1:1 but eventually they conceded that the bond was losing value, to date the official RBZ interbank rate is at 1:6 with the United States Dollar while on the black market it was going up everyday and was at 1:12 today.

Consequently the prices of goods and services has been going up almost daily, its easy to see why people would prefer to trade in United States Dollar than our bond currency

Effectively this statutory instrument brings to an end the local trading using a multi-currency system and brings back our Zimbabwean dollar back from where demonetised currencies go to die, well, the new currency is not quite here, but technically it is since the Bond Currency and the RTGS currency will be trading 1:1 with the Zimbabwean Dollar (yes we have a currency called the RTGS, dont even ask about that I dont understand the differences and it doesnt matter now its all Zim Dollar)

What does this mean ?I dont know economics but I know perception and confidence play a lot in the success and stability of an economy and right now there’s not much of confidence in the government, the economy and the Zim Dollar, which means there’s going to be resistance and rise of black market dealings and probably more shortages. I understand why countries need to have their own currencies but we are nowhere near ready to just be waking up and making such sweeping changes…

~B

PS Continuing the #winterabc after taking time out to mourn the death of a family friend

19 Comments

  1. Beaton, this is a very difficult situation for Zimbabwe, particuarly all who live there and those that work in surrounding countries. A good friend of mine lives and works here, I know she’ll be very worried about this news. Eventually she had hoped to return and live in Zimbabwe.

    Liked by 1 person

    1. Its some trying times, you can tell people are reaching that limit where they will soon start being ungovernable….
      But I am sure eventually the dust will settle and real normalcy will prevail
      ~B

      Liked by 2 people

    1. Thank you, yeah it was such a tragic loss.

      The currency thing is all kinds of chaotic right now, maybe when the dust settles there will be some sort of answers
      ~B

      Liked by 1 person

  2. I m so sorry about the death of your friend! I hope the new currency decision either changes or turns out better. I have heard that our electric company is going to raise their rates, so we are starting to think about where we can cut back. It’s horrible when things like this happen and it seems we have no control over them.

    Liked by 1 person

    1. thanks… its barely a week into the “new” currency and its not looking promising..
      I think our electric company should just hike the tarrifs than keep complaining about unviable charges while electricity is now something i see for 7 hours a day
      ~B

      Like

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