Bond notes to cir­cu­late till Zim dol­lar re­turns: RBZ

Chronicle (Zimbabwe) - - Business Chronicle -

Bond notes are not a sur­ro­gate Zim­babwe dol­lar for they are not cur­rency but a fi­nan­cial in­stru­ment, is­sued at par with the US Dol­lar”

THE Re­serve Bank of Zim­babwe (RBZ) has said bond notes, which are due for in­tro­duc­tion this month, will re­main in cir­cu­la­tion for as long as the coun­try does not have its own of­fi­cial cur­rency.

The cen­tral bank has had to fire fight and de­fend its de­ci­sion to in­tro­duce the bond notes, which a scep­ti­cal pub­lic views as a back door at­tempt to in­tro­duce the dumped Zim­bab­wean dol­lar.

In­tro­duc­tion of the notes was mooted as part of mea­sures to ease liq­uid­ity chal­lenges as well as mo­ti­vate ex­porters to sell more of their prod­ucts out­side the coun­try to earn for­eign cur­rency.

In terms of the fa­cil­ity, the cen­tral bank will award ex­porters a bonus of be­tween two and five per­cent of the value of to­tal ex­port re­ceipts in bond notes, which will be cred­ited to the ex­porters’ lo­cal bank ac­counts.

In a state­ment tack­ling var­i­ous is­sues sur­round­ing the soon to be in­tro­duced le­gal ten­der, the RBZ said the bond notes were not a cur­rency but a fi­nan­cial in­stru­ment pro­vid­ing a con­trac­tual right to re­ceive or de­liver cash.

“Bond notes are not a sur­ro­gate Zim­babwe dol­lar for they are not cur­rency but a fi­nan­cial in­stru­ment, is­sued at par with the US Dol­lar. Bond notes will op­er­ate in the same man­ner that the Bond coins have been oper­at­ing,” the cen­tral bank said.

“Bond notes will ex­change at the same value as the US Dol­lar. When the RBZ in­tro­duced the Bond coins for the pur­pose of change in 2014, many have been scep­ti­cal that they will not main­tain their value, which they have done.”

The RBZ em­pha­sised that it would not print more than $200 mil­lion worth of the new notes, adding that there were var­i­ous safe­guards put in place to en­sure that did not hap­pen.

Be­tween $3 bil­lion and $7 bil­lion is es­ti­mated to be cir­cu­lat­ing in the econ­omy, with ex­perts say­ing the bond notes to­tal value was rather in­signif­i­cant for the pub­lic to be wor­ried about their ef­fect.

The cen­tral bank said the notes were be­ing printed out­side the coun­try for se­cu­rity rea­sons and that they were be­ing in­tro­duced as a tool to curb cash hoard­ing, ex­ter­nal­i­sa­tion and loot­ing which has been the case with the United States dol­lar.

This has led to cur­rent short­ages where de­pos­i­tors were strug­gling to ac­cess cash at banks. The RBZ said the bond notes were re­deemable at any bank in ex­change for other multi-cur­ren­cies cur­rently in use in the econ­omy, namely the US Dol­lar, South Africa Rand, the Euro, Ja­panese Yen, Aus­tralian dol­lar, Chi­nese Yuan, Botswana Pula and In­dian Rupee. — New Ziana

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