Africa

Zimbabwe economy: New coins in circulation for Christmas

A poster showing the new 25 cent bond coin in Zimbabwe Image copyright AFP
Image caption Known as bond coins, they are guaranteed by the central bank and are pegged to the US dollar

Special coins issued by Zimbabwe's central bank have gone into circulation in the run-up to Christmas.

Zimbabwe abandoned its currency in 2009 due to hyperinflation and mainly uses the US dollar and South African rand.

But with very few coins for these currencies in circulation, shoppers are given change in sweets or pens.

The central bank governor said there were no plans to reintroduce the Zimbabwean dollar and the new coins would be pegged to the US dollar.

John Mangudya said $10m (£6.3m) worth of bond coins - in one cent, five cent, 10 cent and 25 cent denominations - had so far been distributed to banks.

He said the total amount in circulation would not exceed $50m, Zimbabwe's state-owned Herald newspaper reports.

'Financially traumatised'

Analysts say the shortage of coins has kept prices high as retailers often round them up, which has affected Zimbabwe's economic growth.

Image copyright AFP
Image caption Hyperinflation several years ago meant prices often changed by the hour in Zimbabwe
Image copyright AFP
Image caption The total amount of the new coins in circulation will not exceed $50m, the central bank governor says

"Through the introduction of change in small denominations we are expecting to see self price corrections," Mr Mangudya is quoted by The Herald as saying on Thursday.

The central bank governor described Zimbabwe as a "financially traumatised society", Zimbabwe's private Daily News paper reports.

Towards the end of 2008, annual inflation had reached 231m% and the highest denomination was a $100 trillion Zimbabwean dollar note.

Prices changed by the hour, most schools and hospitals were closed and at least eight in 10 people were out of work.

The economy has since stabilised but many Zimbabweans still struggle to make ends meet.

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