THE Reserve Bank of Zimbabwe (RBZ) has more than doubled the current holdings of bond notes to $79 million in just less than a month as the central bank moves to ease a biting cash crunch amid concerns the apex bank could run the printing press unabated.
Zimbabwe is reeling from a severe liquidity crunch which has worsened as exports collapsed.
The bond notes are ostensibly a 5% incentive on exports, which human rights groups and social movements have rejected as a government ploy to re-introduce the defunct Zimbabwe dollar through the backdoor. The central bank says the bond notes are backed by a US$200 million African Export and Import Bank facility.
Market analysts told the Zimbabwe Independent that failure by the central bank to institute an independent committee to monitor the injection of the notes could dampen confidence.
Sources in government said the central bank would only appoint the committee once a bill on bond notes is enacted. Parliament is currently working on the Bill. To avert a looming legal crisis over the bond notes, President Robert Mugabe in November invoked the Presidential Powers (Temporary Measures) Act, gazetting Statutory Instrument 133 of 2016, giving effect to the introduction of bond notes.
“The major beneficiaries under the export incentive scheme are so far the tobacco growers ($29,4 million), gold producers ($10 million) and diaspora remittances ($5,4 million),” RBZ governor John Mangudya said yesterday in a statement.
“The bank is also encouraged by the increase in the use of plastic money and electronic banking which now accounts for 50-70% of sales for most of the bigger retail outlets in Zimbabwe, including fuel dealers.”
Treasury ditched the Zimdollar in 2009 and demonitised it in 2015 for a basket of foreign currencies dominated by the United States dollar due to an unprecedented economic meltdown characterised by hyperinflation and destruction of wealth.
Just before Christmas, the apex bank injected an additional $12 million bond notes to the $10 million worth of promissory currency it first introduced on November 28 in an effort to ease the cash crunch during the festive season.
The central bank also doubled the withdrawal limit of bond notes to $100. Before the review, a depositor would withdraw a maximum of $50 in bond notes per day and $150 per week.
In October a German company which specialises in the printing of banknotes, Giesecke and Devrient, rejected Zimbabwe’s request to print bond notes for cash-strapped Treasury, prompting the desperate government to renegotiate the printing of the notes.