A dollar now costs R20 on streets of Zimbabwe

A dollar now costs R20 on streets of Zimbabwe

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ZIMBABWE – Nowhere is the rand slipping faster than on the streets of Bulawayo in Zimbabwe – where it has already reached a rate of 20:1 to the US dollar.

The rate is even higher if a buyer wants to use rand coins instead of notes, according to the state-owned Chronicle newspaper.

While major supermarkets and banks in the country’s second city still stuck to a rate of around 16.5:1, fuel stations and buses this week had been offering rand holders the highly unfavourable rate of 20:1, locals and press reports say.

Twitter user @ellejaricha tweeted a photo of an announcement from a Bulawayo filling station owned by the firm Zuva, which was apparently offering a rate of 20:1 on Monday.

The Bulawayo-based Chronicle said Thursday that confidence in the rand had “plummeted”.

Bulawayo is much closer to South Africa than Harare and many families there have a relative working across the border who may send or bring money home.

Rand coins are even less popular than rand notes. The Chronicle said that street vendors were charging a “terrifying” R50 for a $1 phone recharge card, if the buyer insisted on using rands.

Vendors across the country now prefer Zimbabwe’s once-despised bond coins to rand coins. Most refuse to accept rand coins anyway. Bond coins were introduced in December 2014 to make up for a shortage of rand coins in Zimbabwe. They are not tradeable outside the country.

Zimbabwe’s own currency was rendered worthless by the end of 2008, after several years of hyperinflation. Zimbabwe dollar rates slipped so fast that the central bank was forced to print notes in million, billion and eventually trillion dollar denominations. The authorities officially abandoned the local unit in 2009.

The Economy Forecast Agency predicts that the rand will breach the 20:1 rate on the official market by May 2017, although South African bankers are rumoured to be looking at a much earlier date.

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