Banks ordered to operate over holidays as currency deadline looms

By Tererai Karimakwenda
14 august 2006

The Reserve Bank’s announcement that it was removing three zeros from the country’s currency and introducing new notes is reported to have sparked a shopping frenzy as people attempt to get rid of loads of their soon to be worthless money. RBZ governor Gideon Gono code-named the campaign Operation Sunrise and allowed a three-week period for changing over to the new system. And as the August 21st deadline approaches there are reports that everything that can be bought is being grabbed up by fearful Zimbabweans. Banks were ordered to operate over the holidays and there are reports that they experiencing a shortage of new notes. But it is those in the rural areas who are experiencing the toughest time of all.
Associated Press journalist Angus Shaw told us he was out of the country for a few days but he has noticed the shopping frenzy since his return. He said people are buying in bulk more than ever before. A supermarket gave him change in the old notes Monday morning and when he refused to accept it he was told they had run out of new ones. Shaw told us there are arguments at the roadblocks as well. Some of them are not manned by uniformed police but by Reserve Bank teams and what may be intelligence officials.
According to The Times UK newspaper: “Shoppers are buying up luxury cars, refrigerators, food, livestock and anything else likely to hold its value for resale at a later date.” The report also said the police were interviewing a businessman who took away ten cars from a showroom after presenting £100,000 of old notes. One woman is reported to have bought the entire range of double-door refrigerators from an appliance store.
As for the rural areas, Shaw said the banking system had collapsed there after villagers lost trust and began to hoard their money. The mobile banking units that used to go to remote areas are no longer in use. So now the rural population stands to lose a lot of money if they do not make it to banks in the cities to convert the money they were keeping at home. Shaw said the government has made it clear there will be no amnesty on the old notes.
As a reminder, individuals can deposit sums of Z$100 million (£100) and will be allowed more only if they can prove they acquired it through legitimate means. Companies are limited to Z$5 billion and can also deposit more with the required proof.