BOND NOTES OUT . . . Reserve Bank sets cash withdrawal limits

Source: BOND NOTES OUT . . . Reserve Bank sets cash withdrawal limits – Sunday News Nov 27, 2016

Tinomuda Chakanyuka, Sunday News Reporter
THE wait is over! The much talked about bond notes will start circulating on the market tomorrow in denominations of $1 bond coin, $2 and $5 notes, the Reserve Bank of Zimbabwe has said.

In a statement yesterday, the RBZ said the bond notes would be released into the market through normal banking channels.

RBZ said no new accounts would be opened for the bond notes as they would be deposited into existing US dollar accounts.

The notes will come in small denominations of $2 and $5 to fund export incentives of up to five percent which will be paid to exporters of goods and services and Diaspora remittances. RBZ said the initial release of bond notes will be in an amount of $10 million.

According to the specimen of the notes released yesterday, the $2 bond note’s main features are the three balancing rocks and the picture of the Zimbabwe Parliament Building and the Independence torch on the other side. The $5 bond note has the three balancing rocks while the other side has three giraffes. The $1 bond coin looks like other coins already in circulation except that it has a gold circumference.

Some of the other features include the optically variable ink, tactile marks for the visually impaired, latent image and see through perfect register. The bond notes also have the Zimbabwe bird watermark.

The central bank said in line with its thrust to promote a cashless society through the use of plastic money, the withdrawal limit of bond notes have been set at a maximum of $50 per day and a maximum of $150 per week.

“This measure is in tandem with the objective of the Bank to release bond notes into the market on a measured basis which is critical to mitigate against abuse of bond notes,” reads the statement.

The use of bond notes within the multi-currency exchange system which are anchored on the $200 million facility will operate along the same lines as bond coins, pegged 1:1 to the US dollar. RBZ said retailers, fuel companies and other businesses had agreed on the use and acceptability of bond notes as a medium of exchange.

“The Reserve Bank has engaged and agreed with the Retailers Association of Zimbabwe, fuel companies, representatives of the various business associations and the Consumer Council of Zimbabwe on the use and acceptability of bond notes as a medium of exchange in the country,” the bank said.

Members of the public have been encouraged to report any form of abuse of bond notes. According to the gazetted RBZ Amendment Bill 2016, anyone who may choose to inflict any form of damage on bond notes could face up to seven years in prison.

“The Reserve Bank would like to request the public to report any form of malpractice and abuse of bond notes including but not limited to hoarding, defacing, disfiguring or unlawful use of notes and manipulation by person or banks or currency dealers or traders in connection with the use of bond notes,” said the RBZ.

Bond notes come at a time when the country is facing a serious liquidity crisis owing to a number of situations, among them externalisation of the United States dollar. The notes are expected to ease the cash crunch which has seen some banks limiting daily cash withdrawals to as little as $20.

RBZ earlier this year said $1,8 billion was externalised in 2015, a development that worsened Zimbabwe’s liquidity challenges.

That necessitated stringent measures that included restrictions on the amount of cash that can be taken out of the country at any given time to $1 000 per an individual.