New law to legalise bond notes introduction in Zimbabwe

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The Zanu PF government has drafted a Bill to amend the Reserve Bank of Zimbabwe Act in attempts to give the impending introduction of bond notes a more sound legal base.

This follows uproar over President Robert Mugabe’s controversial use of the Presidential Powers (Temporary Measures) Act last month to force the use of the dreaded currency by locals.

The Zimbabwe Lawyers for Human Rights (ZLHR) has filed a court challenged against the alleged abuse of Presidential powers which a legal watchdog, Veritas has said could only be used during periods of national emergency.

However, in what experts say was a strategy to pre-empty the court challenge and also create a more sound basis for the introduction of bond notes, the Finance ministry has since gazetted the so-called Reserve Bank of Zimbabwe Amendment Bill.

“This Bill will amend the Reserve Bank of Zimbabwe Act (Chapter 22:15)(No. 5 of 1999) to enable the Reserve Bank, with the leave of the Minister responsible for finance to issue “bond notes” exchangeable at par with the United States dollar on the same basis that it previously issued bond coins.

“At the same time, the opportunity is taken to validate the issuance of bond coins currently in circulation, ‘for the avoidance of doubt’,” reads the Extraordinary Government Gazette issued November 16 this year.

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Legal expert Kuda Hove said the move to enact a law that forces Zimbabweans to use a currency they dislike was one of the Zanu PF led government’s attempts to bulldoze through, the use of the so-called surrogate currency.

“This amendment has probably been rushed through in response to the ZLHR court application against bond notes and when this amendment is passed bond notes will operate under the RBZ Act and nolonger under the Presidential Powers Act.

“This is another attempt by government at using unjust laws to protect its interests,” Hove told RadioVOP.

Zimbabweans fear the re-introduction of a local currency without first addressing a lot of economic and political fundamentals will lead to the 2008 economic instability during which goods disappeared from shop shelves only to resurface in the black market selling for US dollars.

Equally, Zimbabweans fear their savings in local banks could be lost if bond notes start triggering inflation.

Authorities have allayed fears of a return to the hyper inflationary period saying the US current dollar dispensation shall remain very much in place

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