By Richard Giedroyc
Officially it’s a multi-currency regime. Local people likely have other names for it that would land them in jail for criticizing the government. Regardless, their comments wouldn’t be fit to print here.
Zimbabwe is once again struggling with its currency problems. On Aug. 25 the Reserve Bank of Zimbabwe announced it will import “special coins with similar value to those currently circulating in the economy to ease a shortage of change in the economy.”
Zimbabwe has been using U.S. and South African coins and bank notes since 2009 when due to hyperinflation estimated to be at 1 billion percent annually the domestic currency system collapsed.
According to an Aug. 20 Associated Press news story, “Torn $1 and $2 [US bank] notes are now the major currency on the streets. A growing scarcity of dollars has led some pro-government analysts and politicians to call for a return to the Zimbabwean currency.”
In July Bankers Association of Zimbabwe President Sam Malaba said, “The migration from hyperinflation to multi-currency did a lot of damage to our economy. It pitched our cost structure too high and unsustainable.”
Despite this statement on Aug. 26 the publication New Zimbabwe reported, “Malaba said [the] government should stick with the multi-currency regime for the foreseeable future to maintain price stability as well as strengthen confidence in the banking sector.”
New Zimbabwe quoted Malaba as saying, “The public still retains residual fears regarding the early return of the local currency, following the experience of 2008.”
Malaba painted a bleak picture of the future, saying: “Accordingly, the only avenue for adjustment of the economy remains wage adjustment (specifically wage decline) and/or productivity gains. As productivity gains is a function of all other factors such as energy availability; plausibly, the economy’s only avenue for adjustment is wage decline.”
Zimbabwe officials are ensuring anything other than the government of 90-year old Robert Mugabe gets the blame for the current economic problem facing the country. Unemployment has been estimated at 80 percent. The United States has imposed sanctions against Zimbabwe due to human rights abuses. Zimbabwe acknowledges it expects 2014 growth to diminish to 3.1 percent, however the World Bank forecasts only 2 percent growth for the economically challenged nation.
This article was originally printed in World Coin News.
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