Zimbabwe introduces 'bond notes' to ease cash crunch
Zimbabwe launched a new currency on Monday, issuing $10 million of 'bond notes' that the authorities hope will ease a severe cash crunch but which critics fear will erase their savings less than a decade after a hyperinflationary economic meltdown.
The Reserve Bank of Zimbabwe (RBZ) first announced the plan in May to address chronic cash shortages and supplement the dwindling U.S. dollars that have been in circulation for the past seven years.
However, the announcement triggered a run on the banks as Zimbabweans tried to empty their accounts of hard currency.
The notes have also fuelled some of the largest protests in a decade against President Robert Mugabe, Zimbabwe's leader since independence 36 years ago, and led to suggestions they could cause the 92-year-old's downfall.
"I have bought airtime and I just want to try to purchase something from one of the big supermarkets," said 36-year-old street hawker Tennison Tigere, shortly after withdrawing $50 of bond notes from a Harare bank.
"People are skeptical because of what happened to our old currency in the past when the money lost its value. That is why they think it could happen again."
The bond notes will be officially interchangeable 1:1 with the U.S. dollar, and the RBZ said on Saturday they would be deposited directly into U.S. dollar accounts, where they would be reflected as dollar balances.
The cash shortages have come against the backdrop of slowing economic growth and a devastating drought that has left millions facing hunger.