Felex Share Harare Bureau
Economists have hailed the Reserve Bank of Zimbabwe for introducing bond coins, which were received with mixed feelings when they started circulating yesterday, saying the move will go a long way in easing transactions and restoring good pricing models.Almost all banks were offering the imported bond coins to their clients yesterday, although the coins were yet to reach many people by the end of business.

Shop owners, kombi operators and vendors were accepting the coins, but some people were expressing reservations on their value in an economy that is using multi-currency.

“The coins have been helpful and you can see that our passengers are happy since they’re no longer worried about getting their change,” said Denford Salimu, a commuter omnibus driver operating the Highfield-City route.

A till operator at OK Zimbabwe’s First Street branch who refused to be named, said their job was made easy yesterday as the coins ended their change problems.

But some people who spoke to our Harare Bureau in street interviews were still sceptical of the bond coins, believing that they signified the re-introduction of the local currency.

The RBZ has since allayed fears of the return of the local currency anytime soon, saying it will only be considered when the economic factors allow, with the bond coins being introduced only to help make business transactions smooth.

The coins are in denominations of 1c, 5c, 10c and 25c and there are plans to introduce a 50c coin later.

Rand coins of 10c, 20c, 50c, R1, R2 and R5 worth about R30 million will also be imported to complement the special bond coins.

The bond coins have been issued on a one-to-one equivalence to the US dollar coins and will be interchangeable into US dollars at any bank, shop, supermarket or other business in Zimbabwe.

The economists said the onus was now on the business community to reciprocate and do away with “convenience pricing” by adopting accurate pricing of goods and services.

Economist Gift Mugano said consumers would no longer be forced to buy unbudgeted and unwanted goods.

“The introduction of the bonded coins is a well thought move by monetary authorities which will go a long way in easing transactions,” he said.

“You recall during the introduction of the multiple currency in 2009, Newsday (newspaper) was going for 50 cents or R5. At that time, there were problems of change and in this regard, they introduced a token which the public accepted and used until the point when they raised the price to $1.

“This is the same scenario we’re having and fears which are alleged are built by the media creating a storm in a tea cup.”

Harare based economist Witness Chinyama said the lack of change had contributed to the overpricing of commodities.

“The good thing the money authorities have done is to remain within the framework of the multi-currency regime,” he said.

“The RBZ should’ve done enough publicity because at the moment people think that the fact that the denominations don’t go outside the border means local currency is returning.”

Confederation of Zimbabwe Industries president Charles Msipa said businesses would now price their commodities “accurately without having to round up to the nearest dollar.”

But former banker and economist Joseph Sagwati said the coins could create problems because they had “intrinsic value and zero backing to the national gold reserve”.

“It’s unorthodox to create an imposed value of two currencies unless that exchange value is established from currency strength through trade and production,” he said.

“What the authorities are trying to cure are structural supply side issues relating to production incompetency that has cyclically impinged upon our ability to produce for the export and build our reserves.

“What’s required are measures to cement the productive nexus locally from agriculture to manufacturing that will create a funding vault that reduces our indebtedness and concomitantly increase our forex reserves.”

 

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