Zimpapers Logo

Oliver Kazunga, Senior Business Reporter
BOND notes went into circulation yesterday, easing cash shortages at banks across the country.

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya yesterday said the central bank disbursed the bond notes onto the market smoothly. “We released the bond notes worth $10 million and $2 million in $1 bond coins to address the challenge of change. The disbursement was smooth although a certain bank flouted regulations of the Banking Act by advertising the bonds notes through social media platform before we released them,” he said.

Dr Mangudya said the monetary authority will take disciplinary measures against the bank, which he did not name, for flouting banking regulations. The bond notes were released through the normal banking channels in small denominations of $2 and $5 to fund export incentives of up to five percent that will be paid to exporters of goods and services and diaspora remittances.

A snap survey in Bulawayo yesterday showed that a number of bank clients were able to withdraw their money in bond notes as well as the United States dollar.

An official at the People’s Own Savings Bank (POSB), corner 13th Ave/Fort Street said the branch was issuing hard currency depending on availability from the deposits.

“We’ve received the bond notes from RBZ. Our liquidity situation has improved a bit. Our clients are withdrawing money as per official withdrawal limits set by the central bank,” said the bank official.

The monetary authority also introduced a $1 bond coin, which banks were also issuing to their clients.

RBZ has pegged bond notes withdrawal limits at $50 a day and $150 per week.

The notes are at par with the US dollar.

Some of the clients at the POSB branch said the bank ran out of cash on Saturday and they were not able to withdraw their money.

“Following the introduction of the bond notes today, at least we are guaranteed that we will get something today and we just hope this situation will improve going forward,” said Mr Japhet Ncube, a depositor.

At CABS, the bank’s clients at Fife Street branch were yesterday being allowed to withdraw $50 in bond notes and $50 in hard currency. “At least we’re relieved, before the introduction of the bond notes, we were on many occasions here (CABS) allowed to withdraw a maximum of $50 a day but with the coming of the bond notes the withdrawal limit has improved to $100 a day. We just hope the situation will get better going forward,” said Ms Faustina Ncube.

Clients at the National Building Society (NBS) branch in Bulawayo were also being issued bond notes as the bank was reportedly said to have no hard currency.

“As long as the bond notes are acceptable locally as we transact, l don’t have a problem. Their introduction has sort of eased the cash crisis. For example, imagine if they were not there, and the bank tells you that it doesn’t have hard currency, you would walk away empty handed,” said a client at NBS, who preferred not to be named.

Confederation of Zimbabwe Industries (CZI) vice president Mr Sifelani Jabangwe said: “We haven’t heard of anything dramatic that has happened to our members as a result of the bond notes, a clear sign that going forward if the situation continues like this, the notes can aid in easing the liquidity situation.  Certainly, the market has been suffering from liquidity crisis especially those businesses that deal with cash.”

The Government recently gazetted Statutory Instrument 133 of 2016 which provides a legal framework for the introduction of bond notes as acceptable legal tender in the country.

SI 133 of 2016 President Powers (Temporary Measures) Amendment of the Reserve Bank of Zimbabwe Act, empowers the central bank to issue bond notes using its preferred design, form and material.

@okazunga