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Zimbabwe's New Currency Takes Off

Zimbabwe has undergone a massive currency change. Old cash has become obsolete and shops are only accepting the new currency. Traders are complaining bitterly that business has collapsed because they cannot get hold of small change.

Economist Tony Hawkins said the currency change over on Monday went fairly smoothly. He said the new currency, from which three zeros have been cut, will make it easier for businesses and consumers.

He said banks and commercial computer systems had struggled with the volume of zeros in the old currency and he said shoppers would no longer have to carry giant piles of money for small purchases.

Vendors in the consumer sector were struggling after the changeover. Several working outside a shopping center in Harare's northern suburbs said they had not made any sales because they did not have change for customers.

One vendor selling fresh fruits said his business had collapsed because people couldn't get enough money from the banks.

"Last week business was very good because we were accepting the old currency, but by now it is getting difficult, the new currency is very few," he said.

A manager at a normally busy supermarket said business had been very brisk in the last few days as people off loaded old currency.

There were few customers on the first day of the new currency. He said the problem was people had no money to spend as banks were short of the new currency, particularly in smaller denominations. He said tellers at checkout points were suffering abuse from customers, because they had so little change.

"As for yesterday, when we started this thing of new moneys, it seemed to be a problem and everything seemed to be chaotic, but especially with the change," he said. "They were no longer allowing the old money for change so they knew that was their last day yesterday, so everyone wanted new money as their change. We didn't have those small money to change them ."

Early Tuesday, banks were busy accepting last deposits of old notes from traders only. Customers trying to deposit or exchange old notes were turned away.

Bank tellers said they had insufficient small denomination notes for businesses because the central bank had not provided enough. They said they did not know when this situation would improve. Reserve Bank of Zimbabwe officials were not available for comment Tuesday.

One trader said that when more small change became available, life would be easier. He said previously he had to send several large wooden trunks to the bank twice a day to do business. Now he said the same value of revenue taken over a day would fit into his attache case.

Most economists say this changeover will have to be repeated within two years because annual inflation is at nearly 1,000 percent and rising.

Zimbabwe cannot afford to print normal cash notes. The new money is printed on flimsy paper and are called bearer checks.

Zimbabwe's economy is in its worst crisis since independence 26 years ago and there are regular shortages of fuel and electricity as the government has little foreign currency to import them.