Zimbabwe is going cashless as cashMoney in physical form such as banknotes and coins. More grows scarcer. Triggered by a series of crises where the Zimbabwean dollarMonetary unit of the United States of America, and a number of other countries e.g. Australia, Canada and New Zealand. More saw its value plummet, the US dollar was adopted in 2009 as an alternative currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More. Unfortunately, there are not enough greenbacks to go around and cash is becoming a hard-to-come-by commodity.
Out of fear of another economic crisis, most people hoard their dollars as soon as they get their hands on them: a token of security in a country where cash withdrawals are limited to a certain value and where lines at banks are endless.
The use of debit cards has exploded since the beginning of this year, but this trend is causing growing inequalities. Almost 70% of Zimbabweans are unbanked which means that only a minority of the population can pay for goods with currency. Parishioners are complaining that the church’s recent acceptance of debit cards for offerings has exacerbated these inequalities. Also, in a country where almost 90% of the population works in the informal economy, cash inaccessibility has been forcing people to fall back on the most ancient form of commerce: barter.
The government is hoping to curb this trend by introducing African Export-Import Bank-backed bond notes, but it remains to be seen whether it will solve the severe liquidityDescribes the extent to which assets or rights can be converted into cash without causing a significant decrease in the asset’s price. Accordingly, liquidity is often inversely proportional to the profitability of the asset and involves the trade-off between the selling price and the time needed to convert it to cash. In finance, cash is considered the most liquid asset and cash is sometimes used as a synonym for liquidity (e.g. cash reserves; cash pooling…). More problem because, unfortunately, Zimbabweans are affected by a great feeling of distrust in any government-issued currency.
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