THE Reserve Bank of Zimbabwe (RBZ) says it will drip-feed bond notes into the market by month-end as it takes a measured approach to the introduction of the surrogate currency amid public resistance.
By Bernard Mpofu
Central bank chief John Mangudya told businessdigest this week that bond notes will be released to the market in a measured manner to calm public fears.
Sources said the bond notes will be printed either in Europe or South Africa, although Mangudya declined to comment on the exact country, citing non-disclosure agreements.
“To ensure that we manage market sentiment, we have come up with smaller denominations of the bond notes. By month end we are going to be drip-feeding the bond notes into the market and we will continue importing the United States dollar,” Mangudya said. “The bond notes will be printed out of the country and that is why they are not in the market. They will be printed on special paper to ensure that there are no counterfeits and are acceptable in the market.”
Mangudya said government will by the end of the month appoint an independent body to ensure oversight of bond notes issuance.
Turning to the importation of foreign currency, Mangudya said government will continue importing United States dollars as it maintains the multi-currency regime introduced in 2009. Currently, the government is importing up to US$10 million per month, down from US$15 million during the tobacco marketing season, the governor revealed.
Last month, the Zimbabwe Independent reported that a German company which specialises in the printing of banknotes, Giesecke and Devrient, had rejected Zimbabwe’s request to print bond notes for cash-strapped Treasury, prompting the desperate government to turn to neighbouring South Africa and other countries for help.
Pro-democracy activists have approached the RBZ, querying the timing of the bond notes and the legal implications of the facility which was not ratified by parliament. Protests have been held in Harare with threats of more to come over bond notes.
Zimbabwe is in the grip of a serious cash crunch, which has worsened gradually since the country abandoned the local currency in 2009 for a basket of international currencies dominated by the US dollar.
Low nostro account balances and a surge in government borrowings last year triggered biting liquidity shortages.