Source: BOND NOTES SHOCKER Forex dealers ‘exporting’ notes Foreign businesses not banking US dollars – Sunday News May 14, 2017
Sunday News Reporters
BOND notes are reportedly being shipped out of the country by unscrupulous currency dealers conducting their business across the country’s borders.
The dealers are exchanging them for foreign currency especially to travellers coming into Zimbabwe. Bond notes were introduced last year and were meant to plug leakages of foreign currency as they can only be used as legal tender in the country.
However, as the bond notes were easily accepted and trading at par with the United States dollar, the currency dealers have taken advantage of this to ship the notes out of the country’s borders, where they exchange with regional currencies to people travelling to Zimbabwe.
The situation has been compounded by the general shortage of the US dollar locally forcing those travelling to Zimbabwe to opt for bond notes as they can be used in the country in the same way the US dollar is being treated. This has created high demand for money as local bank customers need the notes which are now being shipped out of the country.
The development has also created a situation where even those in possession of regional currencies such as the rand opt for the bond notes since their currencies are not widely used in Zimbabwe although they are part of the multi-currency basket.
The situation has resulted in the shortage of the notes, despite the Reserve Bank of Zimbabwe indicating that there were $140 million worth of bond notes and $20 million worth of coins that have been released into the market. The cash shortages have seen some banks cut withdrawal limits to as low as $30 per day, with some banks disbursing coins. Withdrawal limits stipulated by the RBZ are $100 per day and $300 per week.
Our correspondents in Beitbridge, Plumtree and Victoria Falls gathered that that currency dealers who operate in areas and cities located after the neighbouring countries’ borders, were seen with wades of the bond notes. The money changers are mopping out the foreign currency that is supposed to get into Zimbabwe by luring travellers to change their money into bond notes before getting into Zimbabwe. Some of the money changers interviewed at Ramokgwebana Border Post in Botswana said business was brisk because people know that Zimbabwe was “facing money challenges” and would rather cross into the country after securing the bond notes.
“They will rather change their money here and that is why we try by all means to get the bond notes to conduct business. Shop owners and other people are now coming with the notes and we give them pulas. In addition we are also making sure our people in Zimbabwe keep on supplying the notes so that we are in business,” said a money changer who declined to be named.
The money changers interviewed by our correspondents on the South African side of the Beitbridge Border Post and Victoria Falls Border Post in Zambia were singing the same hymn. This comes amid reports that bond notes were also being sold in exchange for US dollars in Manga, a town near Beira in Mozambique.
RBZ governor Dr John Mangudya yesterday confirmed that the notes were now being taken out of the country blaming indiscipline and the lack of confidence in the local banking system.
“There is a lot of indiscipline in this economy. There is a thin line between indiscipline and lack of confidence. People should learn to bank their money and no one should trade in foreign currency if they are not registered,” said Dr Mangudya.
He said they have also discovered that money changers were being supported by unscrupulous traders and individuals who have a strong appetite of rent seeking behaviour and externalisation.
“The Bank in close co-operation with the police and Zimra has stepped up operations to deal with that malpractice. It is such indiscipline that have crept into our society that needs to be addressed to enhance the efficient circulation of money in the economy. It is against this background which has necessitated the Bank to establish a hotline or whistle blower facility as a national approach to enhance compliance with the rule of law. These measures, which include the enforcement of the Bank Use Promotion Policy, have begun to bear fruit.”
Dr Mangudya said Zimbabweans who love their country should report such cases.
“As a country we need self check mechanism, because it is our money that is being abused,” he said.
Dr Mangudya also took a swipe at some foreign businesses operating in the country whom he accused of causing cash shortages by hoarding foreign currency and shipping it out of the country illegally.
“The other challenge is with some foreign businesspeople who are not banking their money. They came here looking for the US dollar. They don’t bank their money but ship it out to their respective countries,” he said.
Added the central bank chief; “Haemorrhaging of cash is something we have to fight as a whole country. It’s our money that is being shipped out. It is money belonging to tobacco farmers and small-scale miners that is being externalised. Our businesses should learn normal business practice where you bank surplus cash within the prescribed timeframe. As Zimbabweans we should be jealous and angry why people are externalising our cash and creating cash shortages.”
COMMENTS
If this is materially true, I reserve judgement in this regard, it is consistent with the effects of a confidence destroying economic policy and the creative adaptiveness of those subject to that policy. The Misrule of Law, characteristic of the Zimbabwe government, feeds into this climate, and appealing to the Rule of Law by the government is hilarious. There is nothing shocking about what Zimbabweans have to do to survive their government.
This is the usual smoke and mirrors. Let’s say a Zim forex dealer exchanges bond notes with rand for a South African to holiday in Zimbabwe. Guess where the bond notes are spent? The simple fact is that you can’t externalise a currency that can only be used in one country.
The reason the banks have run out of cash is because your government has taken it all. Mangudya says people should be jealous and angry that people have externalised and created cash shortages. He is right. However what he won’t say, because it is not in his interest, is that the jealousy and anger should be directed firstly at Robert Mugabe and his attendant ZANU parasites. They are the thieves that have your money.
Indiscipline, INDISCIPLINE!! Governor how do you have the audacity to even mention that word? The RBZ is the elite’s private bank, hows that for indiscipline.
The lack of confidence you speak of has absolutes behind it. All Zimbabweans are fully aware of all the financial theft and skulduggery at RBZ and Govt. The most recent one that comes to mind is the Govt hijacking the RTGS system to pay Civil Servants.
Don’t treat us like children you idiot.
This story lack credibility, we are taken for a ride. The causes of foreign currency are different from causes of shortage of bond notes. Who can can really keep volatile currency like Bond Notes in place of proper money. Travelers may keep very little of Bond Notes just to spend right here in Zimbabwe, and that is very insignificant. People are note banking bond notes just because getting it back from the bank is very cumbersome and expensive. As for foreign currency, we do not generate it, and the little that we had, had been gobbled by imports and numerous travel by government officials.
true, getting back the money i deposit is nearly impossible. you rather incur transport costs ferrying your cash to the desired destination than banking kkkkkkkkkkkkkkkkkk mangudya
mangundya should not make noise abt the paltry dollars in the hands of a few forex dealers. they are even assisting tourists who were going to be stranded.
How many USD were used in Singapore last week alone by one family?