Concern from a cross section of residents and small business traders has rippled across Harare following the introduction of four more currencies into the economy at the end of January.
The currencies have been added to the South African rand, the Botswana pula and the US dollar which are already in circulation. Some town dwellers believe that it is a move by the central bank to complement the US dollar but some have expressed concern over the potential proliferation of counterfeit notes as most of the security features for the rupee, yuan, yen and Australian dollar remain unknown.
Doubt Magwenzi, a Harare based entrepreneur, highlighted the fact that while it is a good move to ease liquidity challenges, there is need for government to let Zimbabweans know the security features of the currencies that have been introduced. Other sectors of the public are not yet aware of this development. A hair stylist from the busy Machipisa shopping centre could not confirm knowledge of this development even though she accepted the decision made by the Central Bank. For Magwenzi it is because of such issues that there is a risk that the black market will continue to flourish and exchange rates will remain distorted as people are not yet familiar with the notes, their watermarks and the current exchange rates.
The Indian rupee currently stands at 61.84, the Australian dollar at 1.10, the Chinese yuan at 6.06 and the Japanese yen at 102.52 against the US dollar respectively.
Kudakwashe Musoni, a money changer in the CBD, highlighted the fact that the new currencies might ease the cash crisis currently facing the nation in that people can use any legal currency sent from abroad. It might also entice foreign direct investment. On the other hand, he expressed concern over the disadvantages of this move if that money remains unbanked. He bemoaned the fact that most Zimbabweans, especially shop owners and small business operators, are not keen on banking their money in Zimbabwe and this has impacted negatively on the economy.
At a time when Zimbabwe is already using a wide range of currencies this move has been aimed at enabling individuals to open up accounts using the recently introduced denominations. This also comes in the wake of reduced bank rates introduced by the central bank to guide lending and borrowing. According to The Chronicle, 12 February, co-acting Reserve Bank of Zimbabwe Governor Dr Charity Dhliwayo indicated that this move was aimed at sanitising interest rates in the banking sector.
The currencies are not yet in full circulation and it remains to be seen how the people on the streets respond to the new development.