During the past week, many Zimbabweans have been sleeping outside banks in long queues as they scramble to withdraw money as the government prepares to issue new bond notes that will be used as the country’s new currency, Quartz reports. People are traveling hundreds of miles to the capital, Harare, to withdraw money from their respective banks, but long queues have prevented many from meeting with a cashier, forcing them to sleep outside the bank in hopes of getting lucky the following day.
“I’m supposed to be home with my family but here I am spending the night in a bank queue for $50, which I am not guaranteed to get,” 33-year-old Tapiwa Mashingaidze said.
Limited Cash Withdrawals
The announcement that the Reserve Bank of Zimbabwe will be printing bond notes to be used as currency with the same value as the U.S. dollar, has caused panic among depositors, triggering mass bank withdrawals.
Many Zimbabweans fear that the introduction of bond notes will render their local currency worthless, causing them to lose all their savings.
In the wake of this nationwide panic, Zimbabwean banks have experienced increased cash shortages because few people are willing to make deposits.
This scarcity has forced some banks to limit their individual withdrawals to as little as $20 per day.
Failed Economy
Part of the panic has been caused by the fear that the introduction of bond notes will cause another financial crisis like the one the country experienced in 2009 due to hyperinflation that left the Zimbabwean dollar worthless.
In an attempt to ease the liquidity deficit in the country, the Zimbabwean government has introduced different currencies, including the U.S. dollar, South African Rand, and Chinese Yuan, but it doesn’t seem to be working.
“The increase of uncertainty over the impact of these bond notes to the Zimbabwean economy and fears we could see a repetition of 2009’s hyperinflation bodes ill for the economy across the board,” senior economist at IHS Global Insight, Alisa Strobel, said.
The cost of living has become unbearable for most Zimbabweans, triggering mass anti-government protests and citizens to call for 92-year-old President Robert Mugabe to retire.
Mugabe, who has led the country for more than three decades, has dismissed the protests and threatened to attack those who oppose him.
