BY TAFADZWA KACHIKO
THE United States Embassy in Harare says all US dollar notes including soiled and damaged ones remain legal tender amid complaints that businesses were rejecting them.
Illegal money changers are making a killing by exchanging old and torn US notes for a fee, while some shops totally reject them or undercut their value.
A torn US$10 note is being exchanged for anything up to US$8.
In a statement, the US Embassy said all notes remain legal tender unless advised by the Federal Reserve.
“US government policy is that all designs of US Federal Reserve notes remain legal tender or legally valid for payments, regardless of when they were issued. This policy includes all denominations of Federal Reserve notes from 1914 to present,” the Embassy said on Thursday.
“The US government provides information on its currency through its US Currency Education Programme which ensures users of US currency around the world have access to education, training, and information about Federal Reserve notes.
“Any badly soiled, dirty, defaced, disintegrated, limp, torn or worn out currency note that is not mutilated and does not require special examination to determine its value, is considered legal tender by the US government.”
The Vendors Initiative for Social and Economic Transformation (VISET) director, Samuel Wadzai welcomed the clarification by the US Embassy.
“We welcome the clarification because there was a lot of confusion in the market and we hope this will help ensure certainty. We urge our members not to reject the notes. It’s not our money,” Wadzai said.
Economic analyst Vincent Musewe said banks and businesses must take the lead in instilling confidence on the use of damaged bank notes.
“It all depends on whether people accept them. Our banks must educate people and convince them of this fact and also easily exchange the notes. Banks must take the lead and instill confidence in the public,” Musewe.
Chitungwiza Business Association Secretary General David Ndoro said: “It’s possible only if the banks accept those soiled notes. In turn we can accept from customers. Major wholesalers and retailers are refusing the notes also, so it’s a real challenge.
“Another challenge is that most traders do not bank USD due to high charges and fear of ever changing monetary policies. They see it safe to keep their USD at home. Under such a scenario no one accepts such money.”
The majority of Zimbabweans are suspicious of banks and prefer to keep money under pillows as memories of the 2008 hyperinflationary environment where their savings were wiped, while in banks remain fresh.