Central Bank’s ‘Project Sunrise’ plunges Zimbabwe into darkness

By Lance Guma

1 August 2006

The Reserve Bank governor has called it ‘Project Sunrise’ but many Zimbabweans are in the dark over the new currency that has had 3 zeroes chopped off. Thousands of people countrywide queued at several banks to deposit their money and beat a 21-day conversion deadline set by the central bank. According to businessman Eddie Cross there was chaos and confusion on the first day of the new monetary regime. ‘Barclays Bank and Beverly closed their doors; Standard Bank traded but advised their clients to write cheques, using the new denominations with the endorsement "Revalued" on the cheque. Zimbank simply traded as normal -refusing to issue the new currency,’ he said.

Cross says some major firms closed shop to try and re-organise before re-opening while others refused to accept cheques and the old currency. There were the odd companies here and there that continued trading as normal. Simon Muchemwa in Harare reports of long winding queues at banks with people jostling around trying to make deposits. He says there is a mixed reaction from the community over the new changes. There are some people who actually believe prices have gone down and are celebrating this perception and those who are aware the measures will short change them. Limits of Z$5 million for those bringing Zimdollars into the country have been condemned as too low and a deliberate strategy to keep millions of notes out of the new circulation of money.

Muchemwa says he spoke to several forex dealers and they all predicted the Zimdollar is set for a dramatic tumble in coming weeks since people are holding on to their forex and shunning the Zimdollar. The business community is also frantically trying to make adjustments that will fall in line with the new measures but reports reaching Newsreel are that the practical implications have created a nightmare for most. Payrolls, bank accounts, prices and general computer data have to be adjusted. Building society CABS issued a statement to their clients saying they have closed all their external interfaces which include Point of Sale swipe machines, internet banking and cheque withdrawals.

‘Cheque acceptance will be for cheques dated from 1 st August 2006 with new dollar values. These cheques will be required to be endorsed with the word “revalued” and counter-signed by the drawer,’ a CABS statement read. The bank says until such time as their computer systems are available these amounts will be credited to client accounts in the equivalent value of old dollars. The problem is that both new and old currencies are set to be in operation at the same time, although according to Cross ‘the new notes have not put in an appearance yet.’ The other downside to this new measure he says is ‘the cost of printing the smaller notes, which will be virtually worthless, and which must have been at least 50 new dollars per note (50 000 "old" dollars) so the loss on this operation must run to many billions of "old" dollars.’

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