Zimbabwe’s finance minister Patrick Chinamasa has used “Emergency Powers” to create a new law to ensure that the new currency, “Bond Notes” are accepted as legal tender when they are introduced into the economy, probably next week.
He said early Tuesday that a statutory instrument was gazetted which would also make sure that no one would be “duped by fake bond notes which may be introduced by unscrupulous members of society”.
About R1 billion of the bond notes will be deposited, as a five percent bonus, in the bank accounts of exporters, and from there will begin to circulate in the economy.
According to John Mangudya, governor of the Reserve Bank of Zimbabwe, he secured a loan from the Afreximbank in Cairo, of which Zimbabwe is a shareholder, to back the new currency, which he says is not a substitute for the old Zimbabwe dollar which was abandoned in 2009 after it collapsed during hyperinflation. Zimbabwe then largely adopted the US dollar as its main currency.
Mangudya has not said where the new notes are being printed, but they will be not be available to source imports as they will only be recognised in Zimbabwe’s domestic economy.
Most commentators say the new cash will provide a few months of relief as Zimbabwe is so short of US dollar notes that even civil servants, paid late each month this year, have to queue at banks to withdraw their salaries in tranches of about R1,200 at a time.
Mangudya introduced “Bond Coins” two years ago as there was no change after the Zimbabwe currency was abandoned. The coins are minted in South Africa.
