Wednesday, December 26, 2007

ZIMBABWE WOE AS BANKS STAY SHUT!

Banks in Zimbabwe failed to open on Christmas Day, despite earlier pledges from the central bank governor.
Instead, long lines of Zimbabweans desperate for local currency queued at the few machines dispensing cash.
On top of rampant inflation, mass unemployment and shortages of fuel and basic goods the country is now suffering shortages of bank notes.
The shortage remains despite the introduction of higher-denomination notes last week.
Empty-handed
On Monday the central bank's governor, Gideon Gono, said banks would remain open on Christmas Day and Boxing Day to dispense cash after the new notes failed to cut long bank queues.
But reports from the capital Harare on Tuesday said the banks were closed, leaving customers empty-handed and forcing many to join the lines at cash machines instead.
Just spoke to my mother, it's heart breaking for me to send them money from here in Canada and they're unable to cash it anywhere - Tafadzwa, Toronto.
"I was hoping to find a shorter queue since it's Christmas, but it seems everyone has come out," Tawanda Moyo told Reuters news agency.
Ms Moyo said she was a teacher trying to get money to buy passage home to the countryside for Christmas.
"After a year in which the struggle to survive got harder, one expected to rest through Christmas, not to be queuing for hours," Ms Moyo added.
State media reported on Monday that the central bank had put another Z$20 trillion (worth about US$667m at the official exchange rate, or US$10m at the black-market rate) into circulation by introducing the new notes, Reuters reported.

Long queues for cash have become a common sight. But only a fraction of the existing cash in circulation is in the formal economy - the majority is in the black economy.
Mr Gono blames the currency shortages on foreign-exchange currency dealers, the so-called "cash barons", and Zimbabweans are being urged to report anyone flouting currency exchange laws.
Zimbabwe has the highest level of inflation in the world at more than 8,000%.
Critics of President Robert Mugabe accuse him of allowing the economy to go to ruin but he has remained defiant, blaming the problems on a Western plot to oust him from power.
BBC NEWS REPORT.

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