You might have heard the rumor, it’s true, informal traders such as tuckshops, vendors and other similar businesses are no longer taking $5 ZWL notes. As with other similar changes in attitude in the past it’s not clear what prompted this latest rejection but it could be linked to the recent spike in black market rates with the US dollar now fetching at least $100 ZWL cash on the black market.
We went out with a wad of $5 ZWL notes to Mbare Musika yesterday and attempted to spend them. Predictably our efforts were in vain as sellers flatly refused to take them. The only shops that were willing to accept these notes were OK, Colcom and Farmer’s shops. Fast food chains unhappily accepted them although the cashier mumbled something about them being useless as she could not give them out as change.
The $5 note is in good company in the money grave yard
The note survived last year’s purge when people started refusing it’s counterpart the $5 ZWL bond note. The only difference between the two notes was that the other one had the words bond written across it. People did not just like that for some reason although the notes looked the same and were worth the same.
The RBZ has also in times past sought to prevent the defacto demonetisation of these notes with little success. They would employ the police and members of the Financial Intelligence Unit to go after people and businesses that refused bond notes and coins and some were even arrested and convicted but none of that deterred the rest of the population. Once a note has been marked for death it dies.
Why is the note being rejected?
We are just speculating at this point. The truth is that most vendors use the money to buy foreign currency once they are done selling their wares. Money changers are refusing these notes so the vendors cannot dispose of them. To prevent further loses they simply refuse to take them. That’s like the kiss of death. If sellers won’t take them the public wont take them either and just like that the note is demonitised.
So why are money changers refusing the note? Well it could be because with rates having risen again and prices with them, small notes just become a burden. They are harder to count and transact with leading to errors and time wasted counting and double-counting. They are also bulky making you a police target as they are harder to hide. So as with coins they just refuse to take them and just like that it’s over for them.