President assents to bond notes law

PRESIDENT Mugabe has signed the Reserve Bank of Zimbabwe Act, putting finality on the legality of bond notes that have been in circulation since the end of 2016 to ease cash shortages.

The Act also gives legal backing to bond coins that were already in circulation. According to a Government Gazette published last Friday, the President signed into law the Reserve Bank of Zimbabwe Act (Chapter 22:15) which gives the legal backing to the notes and coins which were running on temporary legislation since they were released into circulation on 28 November, 2016.

Reads the Act: “…bond note means a unit of legal tender whose par value in relation the United States dollar is backed by a guarantee extended to the Reserve Bank by one or more financial institutions and ‘bond coins’ shall be construed accordingly.

“The (Finance) Minister may by notice in a statutory instrument prescribe that a tender of payment of bond notes and coins issued by the bank that are exchangeable at par value with any specified currency other than Zimbabwean currency prescribed as legal tender in all transactions in Zimbabwe to the same extent as that prescribed currency.”

Last month the Constitutional Court threw out an application by National People’s Party leader Dr Joice Mujuru challenging President Robert Mugabe’s powers to introduce bond notes. Dr Mujuru had challenged the legality of a Presidential pronouncement that provided the legal framework for the introduction of bond notes as tender. According to last week’s Government Gazette, the President also put his signature to the Finance Act (2017) and the Appropriation Act (2017) to give effect to the National Budget.