Zimbabwean coins revalued?

[Figleaf]

I think this says the old Zimbabwe cons have jus been revalued by 100,000,000%, i.e. they have the same value in new Zimdollars as in old Zimdollars ...

Peter

Embattled Gono unveils new currency
July 30, 2008, By Raymond Maingire

HARARE – Embattled central bank governor, Gideon Gono has finally unveiled new currency to replace successive families of bearer and agro-cheques that he improvised to serve as legal tender over the past four years.

The central bank chief has simultaneously scrapped an astounding total of 10 zeros from Zimbabwe's multi-digit currency, while resuscitating the use of coins that had long been abandoned due to hyper inflation.

But the central bank has maintained the unpopular cash withdrawal limits that have resulted in both individuals and corporate organisations thronging banking halls every day to withdraw funds.

The new currency reforms come into effect on 1 August, 2008 while the current family of bearer and agro-cheques will remain in circulation until their expiry on December 31, 2008.

"With effect from the 1st of August 2008, the reserve bank is issuing new currency, not bearer notes which others have been counterfeiting, and the new currency signifies a return of the small pocket," Gono announced Wednesday, while presenting his Mid-Term Monetary Policy Review Statement.

"With effect from the 1st of August 2008, all monetary valuations have been redenominated by a factor of 1 to 10 billion, effectively meaning that we are removing 10 zeros from our monetary values.

"What this means is that $10 billion today will as from 1 August 2008 be revalued to $1."

Gono last removed excessive zeros from Zimbabwe's currency back on August 1, 2006 during his disastrous Sun Rise 1 Project. He slashed off three zeros then.

Among some of the denominations that will now be in circulation is a $500 dollar note, whose old value was $5 trillion.

Gono also introduced a $100 note whose old value was $1 trillion and a 25 cent coin whose old value was $2.5 billion. A new $20 note has also been introduced and has an old value of $200 billion.

Gono has also introduced a $10 dollar note to be used concurrently with a $10 coin; a $5 dollar note to circulate concurrently with a $5 dollar coin; a $2 coin as well as a $1 dollar note to be used concurrently with a $1 coin.

More so, 50 cent, 20 cent and 10 cent coins have returned and will now be accepted again in normal day transactions.

"In other words we are saying go back and look for those coins because we never demonetized them in the first place," Gono said.

Again with effect from August 1, 2008, prices shall be denominated in the old and new currency.

"We are also relaxing the cash limit to a massive $200 in new money per day," Gono said, "So the only limitations are really going to be one's deposit in the bank."

Zimbabweans are reeling from a severe cash crisis in which the highest denomination in circulation - $100 billion – is not enough to pay for a 20km ride on urban commuter transport.

Until now, the central bank has kept cash withdrawals limited at $100 billion.

Economic analysts have warned the central bank against introducing a new currency against the backdrop of a galloping inflation officially pegged at a record 2, 2 million percent.

Independent observers peg the rate at above 10 million percent.

It was not clear what substantive safeguards the central bank governor had when he decided to introduce the new currency as the economic melt down continues unabated.

But while Gono may endear himself with sections of a society burdened by the excess zeros in the currency, he still needs to do more to convince a large section of the population which remains skeptical about the introduction of a formal currency within the prevailing economic melt down.

Appointed in 2003 in the midst of an already crippling cash crisis, the central bank governor has been under growing pressure to come up with substantive strategies aimed at salvaging the comatose economy from further collapse.

Gono's intermittent fire-fighting strategies over the past four years have proved largely disastrous mainly as the result of the lack of political commitment to democratic change on the part of President Robert Mugabe's government.

The Zimbabwean leader now stands accused of introducing populist but ruinous policies to maintain his diminished support among Zimbabweans.

Source: The Zimbabwe Times

[africancoins]

Some reports mention the 25 Cent coin but not all....  which does seem odd when 20c and 50c coins will be re-introduced.

More importantly the Reserve Bank of Zimbabwe site includes....

http://www.rbz.co.zw/pdfs/2008Julymps/mps.pdf

and in section 7 (which starts on page 9) there is mention of a...

"25 (coin)" and a "$10 (coin and note)" (notice no "$" sign before the "25") but the ordering of the list that includes these has the "25 (coin)" between the "$100 (note)" and the "$20 (note)"

ALSO

the only coin image I can find is at...

http://www.zimeye.com/coins.html

and although that image is not too good, you can clearly see a new design 10 Dollar coin and a new design 25 Dollar coin.

Will these having any spending power in a month's time ?

Thanks Mr Paul Baker

[translateltd]

I saw this story on the old COINS list yesterday, courtesy of P.K. Saha - I'm sure this is the only case I can recall where old coins have effectively been massively revalued in this way following a change of currency.  I've heard of 100-franc coins being allowed to circulate as 1 new franc (or francs as centimes), which is logical, but allowing them to retain their original value must be a first.

The revaluation must be 1 trillion percent, if my maths is correct (10bn x 100).

Martin
NZ

[a3v1]

I'm sure this is the only case I can recall where old coins have effectively been massively revalued in this way following a change of currency. 

@ Martin,
There is another case: Surinam. When in 2004 the heavily devaluated Surinam Guilder was replaced by the Surinam Dollar, the small change coins up to 250 cent from then on could be used as part of the new Dollar system.
Regards,
a3v1

[africancoins]

Another continued "use" of coins to a changed value - though a special sort of use...

For U.K. coins - at decimalisation - the Maundy coins of the 1, 2, 3 and 4 old pence (an old penny being one-240th of a Pound Sterling) became worth 1, 2, 3 and 4 new pence (a new penny being one-100th of the unchanged Pound Sterling).

Could there be any others ?

Thanks Mr Paul Baker

[a3v1]

Back to the original subject:
It is to be feared that the "revival" of Zimbabwean coins will be very short-lived indeed if nothing is done to combat the disastrous inflation.
At present the inflation rate is 2,200,000% officially, but according to independent economists at least ten times higher.
So, within a matter of months, there - again - will be a need for fresh banknotes with an increasing number of zeros on them
Regards,
a3v1

[chrisild]

It sure makes sense to chop a few zeros off once the economic situation of a country has improved (also inflation wise) or is on that way. In this case however ... well, at least it makes calculations a little easier for a while.

As for the coins, sure, theoretically people who kept the old pieces will have made a huge "profit" today. Except that the hyperinflation has vaporized any such profits. So why not re-use them, for a couple of weeks, until they become worthless again? What I find more surprising is that the government apparently even issued two (?) new coin denominations. Or were these produced a couple of years ago but have never been put into circulation?

Christian

[Figleaf]

Coin Plant Resumes Production

BULAWAYO, August 7 2008 - The Reserve Bank of Zimbabwe's coin mint plant in Bulawayo which had stopped operating following the loss of coin value, is now fully operational after the Central Bank lopped off ten zeros and redenominated the currency last week.

The coin manufacturing plant was constructed at a cost of $500 million and commissioned by President Robert Mugabe in 2001. Zimbabwe has not been using coins since November 2004. Sources at the coin mint plant in Bulawayo told Radio VOP on Thursday that production of coins at the plant has resumed in earnest following the reintroduction of coins by the Central Bank last week. "We started producing coins in March this year. The plant had been lying idle since 2004' said a worker at the bank who refused to be named for fear of victimisation. The worker said previous attempts to mint for regional countries has not been successful due to a shortage of copper and silver, critical components in the manufacture of the coins.
Presenting his Mid-term Monetary Policy Statement on Wednesday last week, RBZ Governor Gideon Gono re-introduced 10, 20, 25, 50cent, $1 , $2, as well as $5 coins.

Source: Radio Voice of the People

[muenz-goofy]

The situation in ZIM is quite confusing. Right now I talked to a friend in Bulawayo by phone. The re-introduced coins are nearly worthless now because of the high inflation rate. Maybe the gov only re-introduced them to get the metal back for other reasons.

There are new coins of 10$ and 25$ minted by Zimbabwean mint in Bulawayo. But those denominations will be worthless as well next week or so. Besides tose coins new banknotes were introduced, which were already printed by "Gieseke and Devrient" in Munich/Germany at 2006 to Jan 2007. Those notes were not come into circulation so far and were kept by the national bank of ZIM. Now there are coming out. I am not quite sure, which denominations are circulating now, but it starts from 20$.

Let us see, how it's going on in Zimbabwe.

Regards
Dietmar

[Figleaf]

If the government wanted to recuperate the metal, the strategy seems to be working. People are using their hoarded coins to pay before they are worthless again, leading to long waiting lines as cashiers have to count piles of coins. People are right, too. While in May, inflation was "just" 12.5 million percent, August inflation is expected to be 50 million percent. In other words, the newly minted coins will probably be worthless before they can start to circulate.

Paying is a pain. The government has forbidden payments in USD, but people trust neither the old, nor the new banknotes. Cheques command a premium of 80%, since they take 5 days to clear. A newly popular means of payment is the gasoline ticket. As long as oil prices rise, this could even be a winning ticket for long-suffering Zimbabweans.

Peter

[BC Numismatics]

If anyone here does get any of the new Zimbabwean coins,& they want to offload them,please feel free to let me know.I'm still finding the coins dated 2001 onwards a challenge to find.I have the 2001 10c. coin,2001 $2 coin,& the 2001 bimetal $5 coin.

Aidan.

[africancoins]

Previously in this thread I mentioned that the Reserve Bank of Zimbabwe site includes....

http://www.rbz.co.zw/pdfs/2008Julymps/mps.pdf

where section 7 (which starts on page 9) mentiona...

"25 (coin)" and a "$10 (coin and note)" (notice no "$" sign before the "25") but the ordering of the list that includes these has the "25 (coin)" between the "$100 (note)" and the "$20 (note)"

ALSO

an image (of sorts) at...

http://www.zimeye.com/coins.html

where a new design 10 Dollar coin and a new design 25 Dollar coin can be seen.

Now I see at...

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=360077325571

a seller in Harare offering the 25 Dollar coin. Therefore any reports of a 25 Cent coin can be ignored until someone sees an image. Image evidence and official statements currently point clearly to the new coins denominations being 10 Dollars and 25 Dollars.

The 25 dollar coin seems to perhaps have seven slight sides.

Thanks Mr Paul Baker

[BC Numismatics]

Paul,
  You will definitely have to report these coins for listing in both Krause & Schoen,as well as listing it on your own website.$25 is a very strange denomination,but not quite as strange as the $750,000 Bearer Cheque though.

Aidan.

[BC Numismatics]

The situation in ZIM is quite confusing. Right now I talked to a friend in Bulawayo by phone. The re-introduced coins are nearly worthless now because of the high inflation rate. Maybe the gov only re-introduced them to get the metal back for other reasons.

There are new coins of 10$ and 25$ minted by Zimbabwean mint in Bulawayo. But those denominations will be worthless as well next week or so. Besides tose coins new banknotes were introduced, which were already printed by "Gieseke and Devrient" in Munich/Germany at 2006 to Jan 2007. Those notes were not come into circulation so far and were kept by the national bank of ZIM. Now there are coming out. I am not quite sure, which denominations are circulating now, but it starts from 20$.

Let us see, how it's going on in Zimbabwe.

Regards
Dietmar

Dietmar,
  All of the new Zimbabwean notes are being offered for sale up on eBay,especially the $5 & $20 notes.I wouldn't be too surprised if large collections containing both old & new Zimbabwean coins are being auctioned off up on eBay.It will be the British Commonwealth collectors who will be buying them up.

As to the real inflation rate,I reckon that it is 100,000,000,000% & going upwards.I wouldn't be too surprised if a new issue of Bearer Cheques come into use,& denominations higher than $100,000,000,000 get issued.'Crackpot Bob' Mugabe & his mates are doing collectors a big favour,ironically.

Aidan.

[africancoins]

Is it not more realistic to talk in terms of monthly inflation - the increase over a month of prices - in cases like this.....

100,000,000,000 per cent annual figure equates to 462 and a bit per cent per month...... Whatever costs X one day will cost X+4.62X i.e. 5.62X one month later.

Thanks Mr Paul Baker