Change of currency (27-06-07)

FOREIGN currency dealers who had been reaping huge returns when the dollar crushed by and average of about 260% against major currencies since June 1 are panicking following reports that the government South African and Botswana want change their banknotes.
Due to the hyperinflationary environ

ment, most Zimbabweans had resorted to keeping their money in foreign currency as a hedge against inflation.
Almost every Zimbabwean household had pula and rand in store with workers preferring to convert their bearer cheques to foreign currency. Some locals are also reportedly changing their money into either pula or rand soon after receiving their salaries.
The change of the countries two currencies was said would be made “soon” according to local bank sources.
“The transition is said to been at an advanced stage in both countries and an official announcement might be made soon to the countries major trading partners,” the source said.
The anxiety among the dealers has sent the pula tumbling down to P1:Z$20 000. Last week, it was trading between Z$25 000 and Z$27 000.
The rand fell from R1:Z$22 000 to between Z$17 000 and Z$19 000.
However, the official exchange rate for the pula is P1:Z$40 while the rand is pegged at R1:Z$35.
Last week the Botswana’s media expressed concern at the amount of its currency which was present in Zimbabwe.
Although a clear-cut decision has not been made, it appears the authorities in that country could eventually opt to phase out the existing banknotes. Should that happen, foreign currency dealers would be left stranded with worthless currency.
According to the media in South Africa, its government was reported to be uncomfortable with the amount of money in the hands of Zimbabwean foreign currency dealers.

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