Scramble for US dollars

Less than two weeks after President Robert Mugabe's government unexpectedly introduced $5 ‘bond notes’, a state-controlled newspaper says notes in denominations of $10 and $20 are likely to be introduced too. Legalbrief reports that the bond notes were first introduced in denominations of $1 and $2 at the end of November, ostensibly to ease a cash shortage. So desperate are shops for hard currency that they are offering discounts of as much as 50% to customers who hand over US dollars. Some petrol stations now have separate pumps where the price of fuel is lower for customers who pay with hard-currency cash instead of using a debit card. The Economist reports that shops in Harare have resorted to indicating two or three different prices for the same item – a US dollar cash price, a bond-note price and a third price if one pays by card. Black marketeers have been quick to help out. Some are offering to convert bank balances into real dollars at premiums ranging from 5% to 30%. The big supermarket chains are not allowed to offer cash discounts or discriminate against customers who use bond notes or electronic cards. Instead they have simply raised their prices.

Full report in The Economist (Subscription needed)