German firm declines offer to print new Zimbabwe currency

Stacks of Zimbabwean dollars. PHOTO | FILE 

A German company has refused to print Zimbabwe’s controversial new currency forcing President Robert Mugabe’s government to delay its introduction amid worsening cash shortages.

The Reserve Bank of Zimbabwe (RBZ) announced in May that it will introduce bond notes that will be at par with the United States dollar to address liquidity challenges.

RBZ governor John Mangudya, who initially announced that the notes would be in circulation by October, said a German company had been given the printing contract.

The launch of the ‘surrogate currency’ was moved to next month and on Friday a leading business newspaper in Zimbabwe revealed that the delays were caused by Giesecke and Devrient’s refusal to print the notes.

Giesecke and Devrient printed the Zimbabwe dollar until the country abandoned the currency in 2009 after it was ravaged by 500 billion percent inflation.

The German embassy in Harare confirmed that the company had refused to print the new currency.

“According to the information that we have from the said company, it will not print bond notes for the Zimbabwe of Zimbabwe. Other that, I cannot say more,” the Zimbabwe Independent quoted an unnamed German embassy official saying.

Cash squeeze

Dr Mangudya refused to comment on the issue but insisted that the notes were being printed outside the country. He said the new currency would be introduced next month.

The RBZ says the surrogate currency would be backed by a $200 million African Export Bank facility.

Zimbabweans fear the introduction of bond notes will see President Mugabe’s government resorting to printing more money in order to extricate itself from a serious cash squeeze and in the process bring back inflation.

Former Vice-President Joice Mujuru challenged the move in the Constitutional Court, saying there was no law that allowed the government to introduce a new currency.

The move has also sparked street protests across the country.

Meanwhile, cash shortages continue to worsen in the country with banks capping withdrawal limits at as low as $20 a day.

Zimbabwe has struggled with currency problems for over 20 years due to a long running economic crisis.

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