Zimbabwe brings different meaning to 'money laundering'
- Published: Nov 22, 2020, 8 AM
Money laundering has taken on a new meaning in Zimbabwe, where worn Federal Reserve notes are being unofficially refurbished for use in commerce.
The country, long an economic basket case, has subsisted for years with the U.S. dollar as the basis for its daily trade and commerce, while hyperinflation wrecks the Zimbabwean dollar.
Collectors, especially, remember Zimbabwean bank notes with denominations as high as a 100 trillion dollars, making it understandable that the U.S. version of the dollar offered more stability.
Zimbabwe chose to abandon its own currency in 2009 after inflation reached 5 billion percent. In 2019 the government tried again. It issued a new version of its own currency and prohibited use of foreign currencies in local transactions. Last March, it changed its mind and removed the ban on dollars, but as NewZimbabwe.com reports, authorities still say it is illegal for foreign notes to be used in commerce and often raid currency traders to seize their foreign currency and impose fines.
People don’t seem to care. In a Nov. 14 story, the online journal said that the $1 Federal Reserve note in particular is what people use for their “daily bread.” Unfortunately, the economy is so weak that it does not generate enough of an inflow of the U.S. dollar notes badly needed for a local business climate dependent on them.
As a result, the populace is so desperate that traders have taken to repairing old U.S. dollar notes for their customers. For a small percentage of their face value, they are buying notes on the black market that are in such wretched condition that here, the Federal Reserve System would shred them. They are then repairing them by any means that works, including tape, thread, or glue.
One currency dealer said, “I don’t care how torn it is, I take it. All I want to see is the serial number, the serial number should be visible on all the sides. Even if it’s shredded by rats, I take it, I do this every day that’s how I survive.”
Although many shops reject them, traders often, after some negotiation, accept the repaired notes.
John Robertson, an economist in the capital, Harare, said, “The main problem is that we do not have faith in our own currency, and so the Zimbabwe dollars that exist are now of such a low value we don’t want to carry them around because you need a large quantity just to buy a loaf of bread.”
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