Zimbabwean shoopers and merchants are not all accepting new bond coins circulated in December, fearing it could mean the return of the Zimbabwean dollar.
Some question the wisdom of the central bank committing $50 million US to small change when there are other pressing needs in the economy, Xinhua reports.
Shop owners in Zimbabwe routinely give shoppers candy, gum, pens and other items in lieu of small change. Circulation of the coins was meant to solve the problem of shoppers being forced to round off their bills to the nearest dollar, but Zimbabweans are rejecting the coins in lieu of “real money” — South African rand and U.S. dollars, the report said.
The Zimbabwean market is dominated with U.S. dollars. Hyperinflation from 2000 to 2009 rendered the Zim dollar worthless, and many people lost their savings after the U.S. dollar and South African rand were introduced in 2009 to stop inflation.
Now they’re wary of the bond coins, and suspicious of the central bank’s intentions.
Promises of compensation that weren’t kept diminished confidence in the banking and insurance sectors, especially regarding the Zim dollar, according to the report.
The central bank hoped acceptance of the bond coins — given to merchants in denominations of 5, 10 and 25-cent coins, would result in lower prices for goods.
A manager at one of the country’s largest retailers said shoppers don’t like the new coins, and would rather have rand and other small items instead.
“They suspect the government intends to restore the Zimbabwe dollar through the back door,” he said, according to Xinhua.
“They are not Zimbabwean coins,” the bank said. “We do not want to bring back the Zimbabwean dollar due to confidence issues.”
Small supermarkets, vendors and public transportation and are not accepting the bond coins from the few customers who have them, the report said.
“I may accept the bond coins now, but I won’t have anywhere to offload them to,” said a bus operator who charges 50-cent U.S. fares on his route.
A cash register operator at a major retail outlet in the Hillside area south of Harare said he had been allocated bond coins to give as change but shoppers always asked for rand instead.
Economist David Mupamhadzi the impact of the coins would be minimal on the economy compared to $4.45 billion current money supply.
Was the $50-million bond coin circulation an optimal use of the scarce cash? “They may ease change problems but with or without coins the market was functioning,” Mupamhadzi said. “Could the money not have been deployed somewhere where the country could get better returns?”
A CCTV Africa reporter asked shoppers and merchants what they thought of the new coins. Check out this video.