Zimbabwe to introduce 'bond notes' in October

Zimbabwe will start circulating local bank notes in October and will not be returning to a domestic currency abandoned in 2009, the country’s central bank governor said on Monday.

Reserve Bank of Zimbabwe governor John Mangudya described the local notes as vouchers meant to boost exports and generate foreign exchange and dismissed talk of a return to the local currency as “unfounded rumours”.

The country will also continue to use the dollar and other foreign currencies, Mangudya said.

There has been a lot of resistance to the bond notes with Zimbabweans expressing concern on the bond notes which they say could open the door to rampant printing of cash as happened between 2006 to 2008, when hyperinflation reached a peak, wiping out savings and pensions.

The authorities are however keen to stress that the bond notes are not an attempt to sneak the Zimbabwean dollar back into the country and they say they will only print $200 million worth of them.

Since January 2009, the southern African country has used foreign currencies, including the US dollar, British pound and Chinese yuan after dumping its unloved currency that came to symbolize a decade of economic collapse.

The opposition had spoken in harsh terms about some of the Mugabe led government’s interventions relative to the grappling economy.

Zimbabwe opposition labels govt's 'local dollar' plan as 'madness' https://t.co/sTuPya065C

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The southern African nation which has been grappling with a devastating drought, has faced a shortage of notes since March, unnerving depositors who fear the central bank may turn on the printing presses again and render their cash worthless.

In an effort to ease the shortage, the Central Bank last week also set priorities for imports and imposed limits on cash withdrawals.