http://zimbabwe-today.com/2016...accounts-bond-notes/

Did anyone in Zimbabwe who had money in a Zim bank really get all their dollars replaced by the new Zim bank notes?

Trading at 1:1? I'm sure people are lining up to trade their dollars

and if hilary gets in we'll have her face on our bills too - that is if we will have any

Folks,

It is for real. Checked with Gary Duckworth this AM. He doesn't see it as a negative.

Mark

quote:

Originally posted by MARK H. YOUNG:
Folks,

It is for real. Checked with Gary Duckworth this AM. He doesn't see it as a negative.

Mark

Duckworth must keep all his money in a foreign bank account and only a nominal amount in any Zim bank. I don't see how this can turn out well. All Zimbos are going to be forced into a cash and barter system rather quickly.

quote:

Originally posted by MARK H. YOUNG:
Folks,

It is for real. Checked with Gary Duckworth this AM. He doesn't see it as a negative.

Mark

Talk about putting lipstick on a pig! There's no way that anyone would think that the new Zim Bond notes aren't going to collapse as fast as the government prints them.

quote:

Originally posted by Fjold:

quote:

Originally posted by MARK H. YOUNG:
Folks,

It is for real. Checked with Gary Duckworth this AM. He doesn't see it as a negative.

Mark

Talk about putting lipstick on a pig! There's no way that anyone would think that the new Zim Bond notes aren't going to collapse as fast as the government prints them.

Hey, you guys are playing into Mugabe's hands, by bringing him your US dollars.


Grizz

Do they accept old Zim dollars??

If so, I am flying there tomorrow. I have quadrilion, zillion trilion zim dollars.

Free hunts to all AR members, with just the interest gained on that every year

What follows is an accurate assessment of the situation by opposition MP Eddie Cross. Sorry, couldn't extract the link.



The Zimbabwe Cash Crisis

By ZimSitRep_M | November 3, 2016
At the beginning of this year the Reserve Bank suddenly imposed cash withdrawal limits on local bank accounts. The limit was US$10 000 a day. That may not be enough for Grace Mugabe, but for most of us it represented a ceiling so high that it made little impact. However, in the closeted halls of commerce, the signal was taken as the first shot in yet another crisis management effort by the authorities.
Source: The Zimbabwe Cash Crisis – The Zimbabwean 03.11.2016 by Eddie Cross

They were right. Cash withdrawal limits were steadily reduced until about two months ago they were set at $500 a day and in reality the markets had already taken control and most banks were simply unable to maintain even this new limit. Today the largest bank in Zimbabwe is restricting withdrawals to $40 a day and even then they run out of money. Queues stand silently outside all Banking Halls and ATM’s from early morning.

When we adopted the dollar and the Rand as our currencies of trade in February 2009 after experiencing inflation at world record levels, the needed cash to make the system work simply emerged and took over – in day’s fuel and food was in free supply after years of shortages. In weeks all retails stores were fully stocked and trade was brisk.

In the next 4 years under a Government of National Unity with an MDC Minister in charge of the Ministry of Finance, there were no cash shortages, fiscal discipline was maintained and the formal economy recovered by a factor of 14 in four years – State revenues rising from $280 million in 2008 to $4 300 million in 2013.


Then Zanu PF took back control of the State in July 2013 and suddenly our world began to fall apart – again. In weeks we went from a cash surplus in the budget to a deficit of $500 million. In months we saw state expenditure on staff costs rise from 60 per cent of revenues to 85 per cent. The following year the deficit in the budget expanded to a billion US dollars – repeated in 2014 and 2015. Like the days of reckless printing of money, the Government simply issued Treasury Bills.

This took billions of dollars out of the economy and replaced them with paper. Normally such paper has real value in an economy and are traded and regarded as a prime asset. In Zimbabwe they quickly lost value, firms selling them at discounts up to 40 per cent and then when they were presented for payment, the State simply rolled them over and issued new paper to replace the matured Bill’s. They were still held in balance sheets as an asset at full face value, but the reality was that unless something drastic happened to get the country back on its feet, they were nearly worthless.

At last the markets said enough is enough and stopped buying Treasury Bills. It shows us that this is really a “command” economy that they were able to get away with this exercise for so long. So, rather than get the fiscal deficit under control, the State simply raided private bank accounts through the nostro accounts that support the interbank transfer system. In the past 10 months they have taken nearly a billion dollars out of the system – a private money to which they have no right at all. As a result the open market system established with such success in the GNU has collapsed, we are back to exchange control and restrictions on imports. Prices are rising as a consequence.

To support the new controls and make it possible for them to manage foreign exchange markets, they have been taking $200 million a month from exporters accounts and replacing these funds with fake dollars via the bank transfer system (RTGS). An academic at Wits University in South Africa called these funds “RTGS dollars”.

In taking all these emergency measures to fund the deficit in the budget, the Government has put the whole banking and financial system under pressure. Balance sheets are burdened with worthless Treasury Bills and the burden of funding the cash withdrawals from the RTGS system rests solely with the Banks and now the Reserve Bank is making electronic transfers of funds in various guises to the Commercial Banks and transferring to the banks the responsibility of paying out to their clients, real dollars or Rand in recognition of the balances in their accounts.

The country is converting to plastic money with the widespread use of debit and credit cards, but this is also simply resulting in the massive build up of bank balances, expressed as “US$” but which in reality have no backing or convertibility. Every dollar withdrawn from an ATM simply makes the situation worse, like a pyramid Scheme; this must eventually simply collapse in a heap and will leave millions of Zimbabweans destitute and bankrupt.

Then they issued a statement on the 4th May 2016 that the Reserve Bank was going to reintroduce a local currency alongside the currencies being used for market transactions. A year before they had introduced local coinage with a face value as US dollars – these were accepted and made a significant contribution to liquidity and market transactions. However paper currency is quite another matter.

What has annoyed me is the pretext that somehow these new notes will be backed by a US$200 million facility provided by the Afroexim Bank of Egypt. This was a pure fiction – no such facility was ever established and in more recent statements this aspect has been abandoned. Then they claimed that the new currency would only be used to pay a phantom “incentive” to exporters. Suddenly exporters started to receive an electronic transfer of “funds” from the Reserve Bank. Their own bankers said they had no idea what to do with these “funds” and opened a suspense account to hold them – expressed as US$. I assume accountants added these funds to the balance sheet and the Commercial Banks hoped that no one would ask for payment from these accounts in real money.

How the State is accounting for these funds is a complete mystery to me. What on earth would they call them and where did they come from? Does this ridiculous exercise simply increase the monthly fiscal deficit?

But of course the real purpose of the new currency was to provide liquidity in local markets – like bond coins. To do so they have to be issued – not as electronic transfers but as real money in paper form. At first they claimed the new currency would be printed in Germany as if, somehow, this would add real value to the paper and ink. That was quashed by the German Government who simply told the company that under no circumstances were they to work for the Zimbabwe Government.

So we went ahead and printed the new currency in Zimbabwe – in the Reserve Bank which has a superb, state of the art printing facility in Harare. Having printed the new currency, the problem was then how to issue it without causing mayhem. So now we have a very elaborate dance going on, led by the Governor and claiming that the new currency will start to come out in small denominations – so small they will not make any difference. Well that is the main point – the new currency will not make any difference, it will only make matters worse. More paper circulating that has no backing and cannot be used in real markets. Just another burden on a bank system that is now perilously close to complete collapse.

Mugabe showing a fist; how nice!

Ah. . . . . we'll be right back to the financial fun and inflationary games of Zimbabwe 2007-12 before we know it! Saeed: We'll be rich!!

And I wonder how Outfitters will be able to send money BACK to you in the event a trip is cancelled or as a result of a service failure. Cant imagine it will be easy to wire comparably large sums of money back to the states or elsewhere.

I'd be a bit more interested in using domestic intermediaries to mitigate risk.

Chris,

Wiring the money back has been difficult right along in several hunting countries as the governments do not want the funds going out of the country. Some of my operators do not want any funds transferred until just before the safari or they have someone Stateside handle their funds and only sending them operating expenses. Cash refunds directly from Africa can be very problematic or impossible. I often am directed to send payment for an African safari to an address in the UK, Australia or RSA.

Mark

Easy answer: just bring cash with you, other than a very small deposit when you book.

And Rhodesia was such a nice country.

I don't know how accurate this is but the currency converter I use (XE) has a Zim dollar to US dollar rate of 361.9 to 1. I have no idea how it is computed or how timely it is.

Gentlemen:
Two issues.

1) Some PHs do require all monies to be paid up front. A PH I knew years ago added to his contract that all trophy fees paid up front and refunded after the hunt via wire if the animal(s) were not taken. I told him this was a misteak and he did it for three years and now has dropped it. While there are + and - in usign an agent, this is one strong + for an agetn to keep all the funds until the hunt is over. Then, he pays the PH and also can quickly refund any money that is due the hunter.

2) When I was in Zim last July I filled out a currency form upon landing in Bulawayo. The officer in charge told me I was only allowed to bring $1000 out of the country. Anything more would be confiscated. That was confirmed when I departed three weeks later from Harare. It was not a problem as I spent what I had but I could forsee it could be. Anyone else know of this?
Cheers,
Cal

quote:

Originally posted by MARK H. YOUNG:
Folks,

It is for real. Checked with Gary Duckworth this AM. He doesn't see it as a negative.

Mark

If that is accurate, then Duckworth is a damned idiot. I'd be interested to know how much money he has on deposit in Zim banks.

Trouble is banks have no money.

They are supposed to ration how much cash they give to each business customer for salaries etc.

They are paying, because there is no money.