EDITORIAL COMMENT: Let’s embrace bond notes for the good of the economy

RBZ

THE Reserve Bank of Zimbabwe will release bond notes worth $10 million onto the market today ending a long wait for the notes which are expected to ease the liquidity crunch in the country.

There has been intense speculation and anxiety regarding the introduction of the bond notes but the RBZ at the weekend allayed fears about the impact of the notes on the economy and urged the public to embrace the notes in the same manner they received the bond coins which have received universal acceptance. The Central Bank has been on a campaign to educate the public about the bond notes with advertisements in both the electronic and print media.

It has however, held back on releasing the features of the bond notes to guard against counterfeits. In a statement released on Saturday, the RBZ set withdrawal limits at $50 a day and $150 weekly while also announcing the introduction of a new $1 bond coin. The notes are coming in $2 and $5 denominations, and will be pegged at 1:1 against the United States dollar.

According to the Central Bank, the bond notes will be deposited in existing multi-currency bank accounts. Parallel to this, the RBZ will continue aggressively promoting the multi-currency system and points of sale that have made transactions more fluid over the months. Key bodies like the Confederation of Zimbabwe Retailers, Zimbabwe National Chamber of Commerce, Consumer Council of Zimbabwe and Passenger Association of Zimbabwe are fully behind the notes, encouraging customers and commuters to transact freely under the new dispensation.

Depositors have been advised not to panic “as the notes are unlikely to flood the market”. The $2 note is green, with an image of balancing rocks on one side and the lndependence flame on the other. The purple $5 note has balancing rocks and images of wildlife. Security features on both notes include a Zimbabwe bird watermark, see-through perfect register, tactile marks for the visually-impaired, security thread, alpha-numeric lettering and optically variable ink.

The RBZ has said any form of malpractice and abuse of these notes, including but not limited to hoarding, defacing, disfiguring, or their unlawful use, manipulation by people, banks or currency dealers in connection with the notes, should be reported to monetary authorities. It also advised the banking public that no new accounts will be opened as bond notes will be deposited into existing US dollar accounts.

We welcome the introduction of the bond notes and hope they will go a long way towards easing the cash crunch in the country. It has been a trying time for the banking public as they have had to endure long hours in queues waiting to withdraw paltry amounts. Clearly the US dollar has been disappearing at an alarming pace from the country with people externalising the greenback.

Zimbabwe has been a magnet for foreigners intent on mopping up the US dollar and capital flight is one of the major problems monetary authorities have been grappling with. With the introduction of bond notes, people will spend more and the liquidity situation will improve. The notes will also promote local production and boost exports. This will in turn bring in the much needed foreign currency.

There is no need for the public to panic as the bond notes will stabilise the market. The Government has allayed fears that it will print more bond notes and by releasing an initial $10 million worth of notes onto the market, monetary authorities are clearly managing the situation. There will be no room for speculative behaviour and the resurgence of a parallel market as the notes will not be all over the place.

We urge the public to believe in the notes and embrace them in the same way they accepted the bond coins. We also urge authorities to be on the lookout for fake notes as some unscrupulous people might seek to profit from the introduction of bond notes.

It is important to point out that bond notes are not a local currency but will aid the multi-currency regime currently in place. We therefore hope the public will accept them in that spirit and in due course they will become part and parcel of the basket of currencies Zimbabweans are using.

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