Zimbabwe’s informal sector is no longer accepting all bond coins including the $2 and $1 bond note coins according to the information we have gathered after receiving a tip. Based on past experience this spells doom for the $2 bond note which was issued back in November. It means the $2 coin has effectively been demonetised barely half a year after it was first issued.
When we went out with the coins we had to Mbare Musika today none of the traders including farmers were not accepting them. We ended up spending them in OK supermarket.
Mudhara mari yenyu haitengi iyi. Zvemacoin tazvivharisa izvi. $2 bond yebepa ndoyasara but manje manje…
[Translation: We are no longer accepting coins. Soon we will not be accepting the $2 bond note too.]What one vendor had to say to us.
Why is this happening
Despite empty promises that prices would remain fixed at March prices nothing of the sort has happened. The prices of some basics such as Washing Powder have more than doubled since March. Inflation has continued to rise in pursuit of the fleeing rate leading to a never ending speed chase as retailers seek to protect themselves.
Last week, when the Reserve Bank announced that they were realising the $10 ZWL bond note the foreign currency black market went crazy. The rates climbed from a tame $45 ZWL: 1 USD to settle at around $65 ZWL: 1 USD with some traders paying as high as $75 ZWL per dollar.
The rate is now oscillating at around $55 ZWL as the RBZ went caveman and ordered Steward to freeze more accounts. While the first account/Ecocash freeze(s) saw the rate dipping significantly in the past subsequent attempts have barely made a dent as illegal forex traders have shrugged off the central bank’s Financial Intelligence Unit’s efforts to stem the tide.
As prices and rates climb the local currency is getting more and more worthless. At a conservative rate of $55ZWL: 1 USD the demonitised coins equal:
$2 coin = USD $0.04
$1 coin = USD $0.02
You need 17 $2 coins to buy a loaf of bread and 34 $1 coins to do the same. You need 240 coins to buy 10kg of refined mealie-meal. Now that’s a heavy load. Currently if you want to buy grocery for a family of 5 you need more than $5 000 ZWL. It’s not an amount you want to carry in coins.