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Zimbabwe's $US: Bond Notes Finally Here

After months of speculation, the Reserve Bank of Zimbabwe will finally release bond notes worth US$10 million onto the market starting toda...

After months of speculation, the Reserve Bank of Zimbabwe will finally release bond notes worth US$10 million onto the market starting today, with withdrawal limits set at US$50 per day and US$150 weekly.

The notes are coming in US$2 and US$5 denominations, and will be pegged at 1:1 against the United States dollar. 

A new US$1 bond coin will also be introduced. The bond notes will be deposited in existing multi-currency bank accounts.

Parallel to this, the Central Bank will continue aggressively promoting the multi-currency system and points of sale that have made transactions more fluid over the months.

Key bodies like the Conferedation of Zimbabwe Retailers, Zimbabwe National Chamber of Commerce, Consumer Council of Zimbabwe and Passenger Association of Zimbabwe are fully behind the notes, encouraging customers and commuters to transact freely under the new dispensation.
Bond Notes Finally Out 

Further, economists yesterday advised depositors not to panic “as the notes are unlikely to flood the market”. Copies seen by The Sunday Mail yesterday show that the US$2 note is green, with an image of balancing rocks on one side and the lndependence flame on the other.

The purple US$5 note has balancing rocks and images of wildlife. Security features on both notes include a Zimbabwe bird watermark, see-through perfect register, tactile marks for the visually-impaired, security thread, alpha-numeric lettering and optically variable ink.

Responding to inquiries from The Sunday Mail, RBZ public relations manager Mr Isaac Muzambi said, “The initial release of bond notes shall be in the amount of US$10 million in denominations of US$2, and US$2 million worth of bond coins. The features of the bond notes will be released simultaneously with the bond notes.

“Various stakeholders, including the Retailers’ Association of Zimbabwe, fuel companies, the Consumer Council of Zimbabwe as well as representatives of various business associations, have engaged and agreed with the Bank on the use and acceptability of bond notes as a medium of exchange in the country.”

Mr Muzambi also said, “In the case of any form of malpractice and abuse of these notes, including but not limited to hoarding, defacing, disfiguring, or their unlawful use, manipulation by people, banks or currency dealers in connection with the notes, should be reported to the Reserve Bank of Zimbabwe.

“The use of bond notes within the multi-currency exchange system, which are anchored by the US$200 million (AfreximBank) facility, will operate along the same lines as bond coins.

“They are pegged 1:1 to the US dollar. The banking public is advised that no new accounts will be opened as bond notes will be deposited into existing US dollar accounts.”

Confederation of Zimbabwe Retailers president Mr Denford Mutashu said consumers need not worry over the new measures. “It is actually a welcome development, we could not have waited any longer as the waiting period created anxiety, with people not willing to spend anymore.

“The notes will definitely promote local production, earning foreign currency is important. The general public must embrace bond notes because they are there to solve the liquidity challenge. We do not have enough foreign currency and the little that we get is sometimes used for not so important things.”

Zimbabwe National Chamber of Commerce (ZNCC) chief excutive Mr Christopher Mugaga said the bond notes will stabilise the market. “I think there was enough education to different stakeholders. l commend the RBZ, it was spirited in advertising the operational modalities. I urge everyone not to panic or worry as they (bond notes) will stabilise this market.

“There should never be any source of concern. It’s time to embrace them and move forward as a nation. For about five months now, it has been written that they are coming, it’s time to accept them,” he said.

Ms Rosemary Siyachitema, the Consumer Council of Zimbabwe executive director, stressed the need for information dissemination. “We are conducting national education and information dissemination around the country. On Friday, we were in Mutare talking about bond notes and we travelled with staff from RBZ.

“Our mandate is information dissemination and to share with people why bond notes are coming,” she said. A Bankers Association of Zimbabwe official who preferred anonymity said the intervention is a step in the right direction.

“The intervention needs to be supported and appreciated because the cash crunch was now getting out of hand. Yes, it is not a permanent solution, but it is a step in the right direction,” the official said.

Harare-based economist Dr Gift Mugano said, “I think we need to stay consistent in the implementation of bond notes. What Dr John Mangudya (RBZ Governor) has pointed out is that the bond notes are an export incentive and bond notes will come through exports.

“People were worried not because of the notes themselves, but of possible overdrives in printing. So I don’t think there is any cause for worry. What it means is that if the US$200 million is divided by 14 million, everyone gets less than US$20, meaning there will not be any flooding of the notes.

“The bond notes will bring back confidence and that confidence happens through belief in them. I don’t think we need to go back to saying bond notes are bad, no, let us move forward.” - Sunday Mail 

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