Zimbabwe: Banks ‘Ready’ to Exchange Old U.S. Dollar Notes

SW Radio Africa (London)

Alex Bell

14 July 2011

Zimbabwe’s banks are reportedly ready to start exchanging old US dollar notes currently in circulation across the country, for new bills, according to the country’s Bankers’ Association.

The Association’s president, John Mushayavanhu, told the state’s Herald newspaper on Wednesday that no payment will be demanded in exchange for the new notes, insisting that the public will be able to walk into any bank and make the exchange.

“Old notes continue to be in circulation because people are not banking money so that the old notes can be repatriated and new notes are brought into circulation,” Mushayavanhu is quoted as saying.

The news will be welcomed by Zimbabweans amid increasing reports of shops, buses and other vendors refusing to accept any defaced or torn bank notes. This is despite the majority of the notes being in an almost worthless state.

It is not yet clear how the exchange process will be facilitated. But economist John Robertson told SW Radio Africa on Thursday that the involvement of the Bankers’ Association shows that the banks themselves are reluctant to launch the operation alone.

“It would appear that the individual banks didn’t want to take the initiative of collecting the notes and incur the cost of transporting them to the US and then transporting the new notes back. The involvement of the Bankers’ Association is to try and make the banks agree to share the cost,” Robertson said.

It’s understood that the US government will replace worn out or damaged money, if it is still identifiable. Robertson said that it is unlikely that the Federal Reserve Bank will have seen bank notes “like the ones from Zimbabwe,” so its not yet clear if they will be accepted for exchange.

The current bank notes in circulation have been left in a very tattered state, because they rarely, if ever, pass through the banks, amid ongoing distrust of the financial groups. Robertson said there is still fear that the Reserve Bank will repossess all foreign currency held in bank accounts when it decides to reintroduce the local dollar, and only pay back what it decides is the right exchange rate.

Last year in March Kupemba attended a commonwealth sponsored meeting held in London, that was looking into the needs of journalists based in the Diaspora.

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