Editorial Comment: We must all embrace new bond coins

zimpSince the introduction of the multi-currency system in 2009, loose change has been a challenge in the economy. The ready availability of US dollar notes, the most commonly used currency in the country, has not been complemented by the availability of coins in similar currency.

While rand and pula coins are available, they are not enough as only bigger coin denominations are in supply.

This forced businesses to peg prices of goods in such a way that no change would be issued or if there was change, consumers were forced to take items they did not need such as sweets or pens to cover the change.

There is no doubt that prices on the local market are distorted because of the shortage of coins. A number of ordinary household goods are pegged at $1, when the actual price should be far less.

At one time, the Bankers’ Association of Zimbabwe suggested importing US coins to solve the problem of change but abandoned the plan due to the huge shipping costs involved.

The recently appointed governor of the Reserve Bank of Zimbabwe John Mangudya has come up with a masterstroke to solve the issue of change once and for all.

Starting yesterday, bond coins began circulating in the economy. The coins are in denominations of 1 cent, 5 cents, 10 cents and 25 cents.

A 50 cents coin will be introduced early next year.

The bond coins are backed by a $50 million bond coin facility negotiated by the central bank.

The face value of the bond coins is equivalent to the corresponding US cent. The coins are also interchangeable into United States dollars at any bank, shop, supermarket or other business in Zimbabwe.

Economic experts have long acknowledged that the lack of coins in the economy had contributed significantly to the overpricing of commodities and forced consumers to overspend.

The whole country must accept this innovation by the RBZ to deal with the problem of change by embracing the new coins. The new coins are not a backdoor re-introduction of the Zimbabwe dollar as claimed by the country’s detractors. Instead, the coins will strengthen the multi-currency system.

The Bankers’ Association of Zimbabwe has already accepted the coins. We expect other sectors of the economy, especially retailers, kombi operators and street vendors to accept these coins as legal tender.

BAZ has said the new coins will go a long way in assisting in the restoration of good pricing models and alleviate the problems associated with lack of change, issuance of change vouchers and change in the form of unwanted goods.

With the country’s banking sector giving its seal of approval to the coins, we don’t see why anyone should reject them for any business transaction.

We expect prices of some goods to fall as the coins hit the economy.

Manufacturers and retailers must review their prices to reflect the new dispensation. Where they were pricing products to get away from the hassle of change, they must reduce prices because change is now readily available.

 

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