Govt announces $2, $5 bond notes to start circulating end of October

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The Zimbabwean government, through the Reserve Bank of Zimbabwe (RBZ), has announced that it will start circulating the much-feared bond notes in $2 and $5 denominations from end of October.

Bond notes worth some $75 million, RBZ governor, John Mangudya, said, would be in circulation by December.

Government in May announced its plan to introduce the notes as an export incentivisation tool that is backed by a $200 million African Import and Export Bank (AFRIXEM) facility.

Several quarters are still opposed to the bond notes which they fear is a step towards the re-introduction of the local currency that was taken out of circulation in early 2009 following hyperinflation.

“The bank is addressing the concerns by planning to introduce smaller denominations of bond notes of $2 and $5.

john-mangudya

 

The bond notes will be gradually released into the economy in sympathy with export receipts through normal banking channels until the $200 million facility is exhausted with the country hitting $6 billion in exports,” said Mangudya.

He, however, repeated government’s position that the local currency would return soon.

“It is critical to note the introduction of bond notes does not mark the return of the Zimbabwe dollar through the back door. It is also important to note that bond notes will not be forced on people who do not like them,” said Mangudya.

The notes will be valid only in Zimbabwe and are rated equal to the US dollar.

The governor said the notes first be in those small dimensions in order to allay public fear regarding the reintroduction of the Zimdollar.

“The macro-economic fundamentals for the return of the local currency are not yet right to do so,” added the RBZ governor

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