Govt warned over higher bond notes denominations

Govt warned over higher bond notes denominations

GOVERNMENT has been warned against the introduction of higher denominations of its surrogate currency, known as bond notes, with bankers arguing it might give the impression authorities want to bring back the Zimbabwe dollar.

Source: Govt warned over higher bond notes denominations – NewsDay Zimbabwe March 14, 2017

BY VENERANDA LANGA

Bankers’ Association of Zimbabwe president Charity Jinya yesterday appeared before the David Chapfika-led Parliamentary Portfolio Committee on Finance, where she also proposed further reduction of withdrawal limits from $1 000 for individuals to $200 per day and for corporates $10 000 to $2 000 per day.

“The reasons why the Reserve Bank of Zimbabwe (RBZ) issued $2 and $5 bond notes and coins was to give confidence that we are not introducing a currency.

“When you start talking around $10 and $20 bond notes, it might open up to wider debate that we are trying to introduce our own currency via the back door,” she said.

Jinya said banks were struggling to find cash to supply the market, adding finance institutions were aware productive time was being spent in queues.

“I am sure every bank would like weekly limits, but for technical reasons it is taking time and for other banks it’s liquidity reasons,” she said.

On delays of real-time gross settlement (RTGS) and transactions through Swift, Jinya said the radical increase in the use of e-transactions for banking was overwhelming banks.

Confederation of Zimbabwe Industries economist Jimmy Pilvos urged the government to adopt the South African rand.

“We would prefer the rand as the currency of reference. The currency to which companies refer their prices must be the rand and the US dollar must be for savings,” Pilvos said, adding government should also re-introduce the Tripartite Negotiating Forum.

Pilvos said authorities also needed to provide incentives for the public to use formal banking systems.

“There is a large quantity of US dollars in the informal market and as business we need to attract those dollars into the formal system because that money can be used to finance nostro accounts. If anyone has US dollars which can go into the formal system, we provide them with an incentive which is a discount,” he said.

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