INDUSTRY and consumers have greeted the Reserve Bank of Zimbabwe (RBZ)’s bond notes with mixed feelings as the promissory notes rattle the market.
By Taurai Mangudhla
The RBZ on Monday unveiled a new family of bond currency, comprising of a $1 bond coin and $2 bond note, adding to the bond coins that have been in circulation since 2014 in denominations of 5 cents, 10 cents, 25 cents and 50 cents.
Some members of the public have criticised the introduction of bond notes, saying this is government’s attempt to bring back the demonitised Zimbabwe dollar through the backdoor, while others welcomed it.
Some smaller retailers and vendors who spoke to the Zimbabwe Independent said they had no option but to accept the bond notes, although they remained wary the currency could still trigger financial chaos.
Insiders in the banking sector said the financial institutions were sceptical about the bond notes and generally concerned about operational complications arising from the use of the promissory currency.
Although banks on Thursday announced an encouraging uptake of bond notes in the market and reaffirmed their support for the surrogate currency through the Bankers’ Association of Zimbabwe (BAZ), insiders say members are concerned about operational problems.
“This statement was largely political and reached after the BAZ meeting on Tuesday, but what I can tell you without going into too much detail is banks are concerned,” a banker, who requested not to be named said. As reported by the Independent last week, banks appear to be supporting the bond notes but fear a nightmare over accounting standard chaos and operational headaches. Banks, according to documents seen by the newspaper, are scared of multi-faceted problems ranging from legal, operational to accounting standard glitches which might cause bottlenecks and turmoil.
Confederation of Zimbabwe Industries CE Clifford Sileya said: “The bond notes have been accepted and are already in circulation.”
Some bankers said the central bank had started monitoring US dollar balances at each bank, encouraging players to issue out bond notes.
“Issuance of the US dollar will soon be rationed and controlled,” a banker, who requested not to be named said.
National Vendors’ Union of Zimbabwe leader Sten Zvorwadza said the bond notes were introduced amid market resistance and remain an illegitimate currency.
“The vendors are very clear, they do not want bond notes, but the currency was forced on them,” Zvorwadza said.
“Bond notes have become a currency of convenience, but we do not recognise them as a legitimate currency because they are not.”
Independent economist John Robertson said Zimbabweans have been forced to accept bond notes due to lack of alternatives.
“The bond notes have been reluctantly and not eagerly taken up by the market mainly because people have no option. If people had an option, they would stick to the US dollar alone,” Robertson said.
Consumer Council of Zimbabwe director Rosemary Siyachitema said her organisation was yet to conclude research on bond notes’ impact on prices.
“We will be using an expanded basket for the purposes of this research,” she said.
Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu said the response was quite positive across the sector with only a few challenges where some retailers initially refused to accept the notes.
“This improved on the next day after the introduction on Monday,” Mutashu said. “They are already requesting the RBZ to increase the daily and weekly maximum withdrawals. There is great need for a massive rollout of point-of-sale machines and double efforts on financial inclusion especially to the marginalised areas and rural areas.”