The Reserve Bank of Zimbabwe (RBZ) said bond notes, which are due for introduction this month, will remain in circulation for as long as the country does not have its own official currency.
The central bank has had to fire fight and defend its decision to introduce the bond notes, which some view in a skeptical way as a backdoor attempt to introduce the dumped Zimbabwean dollar.
Introduction of the notes was mooted as part of measures to ease liquidity challenges, prevent illegal exernalisation of funds, as well as motivate exporters to sale more of their products outside the country to earn foreign currency. In terms of the facility, the central bank will award exporters a bonus of between 2 and 5 percent of the value of total export receipts in bond notes, which will be credited to the exporters’ local bank accounts.
In a statement tackling various issues surrounding the soon to be introduced legal tender, the RBZ said the bond notes were not a currency but a financial instrument providing a contractual right to receive or deliver cash.
“Bond notes are not a surrogate Zimbabwe dollar for they are not currency but a financial instrument, issued at par with the US dollar. Bond notes will operate in the same manner that the bond coins have been operating,” the central bank said.
“Bond notes will exchange at the same value as the US dollar. When the bank introduced the bond coins for the purpose of change in 2014, many have been skeptical that they will not maintain their value, which they have done.”
The RBZ emphasised that it would not print more than $200 million worth of the new notes, adding that there were various safeguards put in place to ensure that did not happen. Between $3 billion and $7 billion is estimated to be circulating in the economy, with experts saying the bond notes total value was rather insignificant for the public to be worried about their effect.
The central bank said the notes were being printed outside the country for security reasons and that they were being introduced as a tool to curb cash hoarding, externalisation and looting which has been the case with the United States dollar. This has led to current shortages where depositors were struggling to access cash at banks.
The RBZ said the bond notes were redeemable at any bank in exchange for other multi-currencies currently in use in the economy, namely the US dollar, South Africa rand, the euro, Japanese yen, Australian dollar, Chinese yuan, Botswana pula and Indian rupee.