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Bo(u)nd for disaster?

Categories : Cash generates security
December 2, 2016
Robert Mugabe of Zimbabwe just issued bond notes as the last hope to stabilize an already struggling economy, but most are skeptical and fear another disaster.
Communication Team / Equipo de Comunicación

To face his country’s disastrous economic situation and the scarcity of liquidity, President Robert Mugabe of Zimbabwe is testing a new solution: government-issued bond notes that are worth 1-to-1 with the US dollar. This desperate move was taken to try and salvage the economy after the abandonment of the Zimbabwean dollar and the subsequent growing scarcity of the US dollar, adopted as an alternative currency in 2009. The fear of another economic meltdown has pushed many Zimbabweans to hoard the little remaining greenbacks, leaving the poor and the unbanked without any alternatives.

Although the move is designed to settle Zimbabwe’s chronic shortages of cash, there are fears that the bond notes will only aggravate the situation and cause yet another hyperinflation in an already struggling economy.

These fears have led many to protest in the streets, leading to violent repercussions from the authorities and numerous arrests.

Mugabe, now 92 and in power since almost 3 decades, will be running for reelection in 2018.

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