Dinar Daily
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Latest topics
» Deadly stampede could affect Iraq’s World Cup hopes 1/19/23
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeYesterday at 6:02 am by Ditartyn

» Dave Schmidt - Zim Notes for Purchase (NOT PHYSICAL NOTES)
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeSat Mar 23, 2024 9:25 am by swizzlestick

» ZIGPLACE
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeWed Mar 20, 2024 6:29 am by Zig

» CBD Vape Cartridges
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeThu Mar 07, 2024 2:10 pm by Arendac

» Classic Tony is back
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeTue Mar 05, 2024 2:53 pm by Mission1st

» THE MUSINGS OF A MADMAN
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeMon Mar 04, 2024 11:40 am by Arendac

»  Minister of Transport: We do not have authority over any airport in Iraq
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeMon Mar 04, 2024 11:40 am by Verina

» Did Okie Die?
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeMon Mar 04, 2024 11:34 am by Arendac

» Hello all, I’m new
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeWed Jan 31, 2024 8:46 pm by Jonny_5

» The Renfrows: Prophets for Profits, Happy Anniversary!
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeWed Jan 31, 2024 6:46 pm by Mission1st

» What Happens when Cancer is treated with Cannabis? VIDEO
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeWed Jan 31, 2024 8:58 am by MadisonParrish

» An Awesome talk between Tucker and Russell Brand
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeWed Jan 31, 2024 12:16 am by kenlej

» Trafficking in children
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeMon Jan 29, 2024 7:43 pm by kenlej

» The second American Revolution has begun, God Bless Texas
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeMon Jan 29, 2024 6:13 pm by kenlej

» The Global Currency Reset Evolution Event Will Begin With Gold, Zimbabwe ZWR Old Bank Notes
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeSun Jan 28, 2024 3:28 pm by Mission1st

» Tucker talking Canada
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeWed Jan 24, 2024 6:50 pm by kenlej

» Almost to the end The goodguys are winning
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeMon Jan 22, 2024 9:03 pm by kenlej

» Dinar Daily Facebook Page
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeMon Jan 22, 2024 3:34 pm by Ponee

» The Fundamentals of Finance and Pimpy Live
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeThu Jan 18, 2024 7:17 am by Dinarhater

» Why Won't the Iraqi Dinar Scam Die?
In the Upside-Down World of Zimbabwe, $100 Trades for $102 I_icon_minitimeWed Jan 17, 2024 5:19 pm by RamblerNash

In the Upside-Down World of Zimbabwe, $100 Trades for $102

Go down

In the Upside-Down World of Zimbabwe, $100 Trades for $102 Empty In the Upside-Down World of Zimbabwe, $100 Trades for $102

Post by RamblerNash Tue Nov 29, 2016 9:05 pm

In the Upside-Down World of Zimbabwe, $100 Trades for $102

Scramble for dollars was compounded Monday when the central bank started issuing a parallel currency


In the Upside-Down World of Zimbabwe, $100 Trades for $102 BN-QY888_ZIMDOL_GR_20161128115900
A man holds newly issued bond notes in Harare, Zimbabwe, on Monday. The Reserve Bank of Zimbabwe has introduced bond notes to ease cash shortages. Photo: Aaron Ufumeli/European Pressphoto Agency

By Gabriele Steinhauser and
Bernard Mpofu
Updated Nov. 29, 2016 9:12 a.m. ET


In Zimbabwe, a U.S. dollar is no longer worth a U.S. dollar.

Money changers charge $102 in small notes for a $100 bill. Workers withdraw their salary by paying other people’s groceries at the supermarket—often receiving less cash than the charge on their card. Online buy-and-sell groups trade large amounts of cash for bank transfers at a 12% premium.

The devaluation—and simultaneous appreciation—of the U.S. currency against itself is one of the more peculiar consequences of Zimbabwe’s worst economic crisis in years.

The Southern African country started using the U.S. dollar in 2009, hoping it would bring stability after years of hyperinflation that added 12 zeros to its currency. But now, with exports collapsing and cash fleeing the country, the greenback has become a scarce commodity.

As people fear the repressive government of President Robert Mugabe may soon revive its own currency, U.S. dollars in the bank are suddenly worth less than in cash. Those fears were heightened on Monday, when the central bank started issuing $10 million in so-called bond notes, a parallel currency which the government insists is only a temporary measure and will be pegged 1:1 to the U.S. dollar.

Anxious Zimbabweans have started hoarding dollars or taking them out of the country, sending the value of the remaining greenbacks still higher. Rare, high-denomination bills, such as the $100, can reap a special premium.

“It’s an utterly bizarre situation,” said Charles Laurie, a Zimbabwean economist who is head of political risk at Verisk Maplecroft. “There’s a growing sense of being alienated from your money.”

Zimbabwe’s government is trying to get a grip. Banks have limited daily withdrawals to as little as $20 and account holders trying to get cash are often told that there isn’t any. Hundreds of Zimbabweans have been sleeping in front of their banks, striving to be first in line when doors open at 8 a.m.

In the third week of November, ATM withdrawals crashed to $20.7 million, down from $79.1 million a week at the beginning of the year, according to the central bank. The central bank has also curtailed the distribution of $50 and $100 bills, which it says are being used to smuggle money out of the country.

This mismatch of supply and demand has translated into varying, and unprecedented, dollar-to-dollar exchange rates.

On a recent Monday night, Blessing, a cellphone trader, approached King, one of around 50 money changers working in Harare’s upscale Eastgate Mall. Like other Zimbabweans quoted in this story, the two men asked that their last names not be published, because the dollar-for-dollar trades are illegal.

“I want $50s and $100s,” said Blessing, gripping a small bag that held several weeks’ worth of earnings. Like countless other cross-border traders, Blessing buys his goods in bulk from Asian salesmen in South Africa, who demand high-denomination notes, and peddles them in Zimbabwe for a higher price.

That night, the going rate for $100 bill was $102, King told Blessing. “You won’t find a better rate this time of the month,” he said, thumbing wads of crisp $100 and $50 notes.

After haggling, the men settled on a rate of $101.50 for $100. Blessing handed over $1,015 in tattered $5, $10 and $20 bills and received $1,000 in return, before boarding an overnight bus to Johannesburg.

At the OK Supermarket in Harare’s Avenues district, Trevor, a construction worker, hovered over customers queuing to pay their groceries. His boss had transferred $400, his monthly salary, to his bank account and Trevor urgently needed cash to pay his rent.

Rather than lining up for hours at a bank and risk getting nothing, Trevor had another plan: Find a shopper with cash, pay by card for that person’s groceries and receive the money in return.

“This is my second month doing this and it’s painful,” said Trevor, adding that he often ends up getting less cash than the charge on his card.

Exchange-rate mismatches aren’t unusual. Black-market dollar rates can often be more expensive than official rates, usually because the central bank pegs the currency at a level the market doesn’t trust. Capital controls can also lead to a devaluation of deposits compared with cash.

But nowhere has the phenomenon of varying exchange rates within the same currency afflicted the U.S. dollar to the extent that it is happening in Zimbabwe.

Discounted dollar-for-dollar trades have become so common that the central bank in October banned businesses from accepting card payments made by someone other than the customer completing the purchase. The bank said it is also working with police to crack down on currency traders selling high-denomination bills. “Such practices are not only illegal, but also have negative effects on the economy,” it warned.

In some instances, the dollar-for-dollar swaps turn into profiteering.

In a buy-and-sell group on WhatsApp, a man who identified himself as Shingie, made an expensive proposition. “I have $3,500 cash, which I’m exchanging for anyone who transfers $3,500 plus a 12% premium to my Standard Chartered account,” the message read. Reached by phone, the man declined to say whether anyone had paid him $3,920 for $3,500.

The bond notes that are now being issued will likely drive up the cost of cash dollars.

“My fear is that bond notes could make this worse,” said Trevor, the construction worker.

http://www.wsj.com/articles/cash-starved-zimbabweans-trade-dollars-for-dollarsat-fluctuating-rates-1480428000

*****************
In the Upside-Down World of Zimbabwe, $100 Trades for $102 258310255 
>>>TNTBS's YouTube Channel<<<
RamblerNash
RamblerNash
GURU HUNTER
GURU HUNTER

Posts : 24270
Join date : 2015-02-19

Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum