Zimbabwe’s central bank has released bond notes onto the market today despite strong resistance from a section of the society.
The southern African country is experiencing critical shortages of cash in the first quarter of 2016, especially the United States dollar, a situation which led to the Reserve Bank of Zimbabwe (RBZ) to introduce the notes as a corrective measure.
A statement released by the bank read, ‘‘The bond notes will be released into the market through normal banking channels in small denominations of $2 and $5 to fund export incentives of up to 5% which will be paid to exporters of goods and services and diaspora remittances.’‘
The bond notes will be released into the market through normal banking channels in small denominations of $2 and $5 to fund export incentives of up to 5% which will be paid to exporters of goods and services and diaspora remittances.
The bond notes are expected to solve the issue of cash shortages even though people still have fears that with inadequate awareness campaign on the new currency, some people might dupe the public with the notes.
The state-owned Herald newspaper reports that the RBZ will release notes worth $10 million onto the market beginning today (Monday 28 November) with the withdrawal limit set at $50 per day and $150 per week.
The notes are in $2 and $5 denominations and will be pegged at 1:1 against the dollar. A new bond coin has also been introduced. The $2 bond note is green and has images of balancing rocks on the side and the independence flame on the other.
The $5 note also has the balancing rocks with three giraffes. The notes have advanced security features including Zimbabwe bird watermark, see-through perfect register, tactile marks for the visually impaired, a security thread, alpha-numeric lettering and optically variable ink.
The bond notes have been given the same value as the US dollar. They are backed by a US$200 million facility from the Cairo based African Export and Import Bank (Afreximbank).
Last week, RBZ Governor John Mangudya said that local banks were configuring the automated teller machines (ATMs) to disperse both the US dollar and the bond notes. This was in response to claims that banks were set to have separate ATMs for bond notes and the US dollars.