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THE Reserve Bank of Zimbabwe (RBZ) has dismissed social media reports alleging the discontinuation of the use of bond notes.

According to ZBCtv, the Central Bank Governor Dr John Mangudya has dismissed the reports with the contempt they deserve.

“The article is not only misleading but is designed to cause confusion, panic and despondency within the economy. Members of the public should not be misled by such counterproductive articles,” he said, in a statement to the national broadcaster.

In the past few days, there have been reports circulating on social media insinuating that bond notes would be phased out on January 26 and urging people to dispose the legal tender as soon as possible.

In 2016, the monetary authorities introduced the surrogate currency under a $200 million AfreximBank-backed facility as a stop-gap measure to eliminate the then pervasive cash hoarding and externalisation of hard cash, mainly the United States dollar.

And of late, there have been calls from different quarters including Parliamentarians urging the Government to demonitise the proxy currency on account that the bond currency has “failed”.

Last November, during the 2019 pre-budget seminar in Bulawayo, Dr Mangudya defended the use of bond notes saying the real cause of problems facing the economy was not the surrogate currency, but ballooning electronic balances that were not backed by productive fundamentals.

The situation was compounded by the $1,35 billion RBZ (Debt Assumption) Act, which was approved by Parliament and signed into law in 2015.

As a result of financial and fiscal indiscipline in the economy, the county has in recent years been plunged into a web of increasing money supply, spurred largely by issuance of Treasury Bills, which has provoked inflationary pressures.

Dr Mangudya has also highlighted that to date, Zimbabwe has registered close to $10 billion electronic balances at banks which were not backed by real money, which bloated balances and not bond notes, have caused inflation as they spiked spending and piled pressure on the little forex reserves.

Meanwhile, Finance and Economic Development Minister Professor Mthuli Ncube, who is in Davos, Switzerland for the World Economic Forum, has announced plans to introduce a local currency within the next 12 months as Government moves to tackle inflationary pressures among other constraints that are choking economic turnaround efforts.

At the World Economic Forum, which ends tomorrow, Prof Ncube told Bloomberg that his Ministry was implementing a cocktail of measures that include enforcing fiscal indiscipline, cutting ballooning Government expenditure as well as increasing compliance on the country’s revenue collection.

–ZBCtv/Business Chronicle