Bond notes acting as supplements: RBZ

THE bond note is supplementing what the banks were already giving to depositors and the maximum withdrawal of the new currency is $50, the central bank explained yesterday.

Source: Bond notes acting as supplements: RBZ – NewsDay Zimbabwe November 29, 2016

BY VICTORIA MTOMBA

Reserve Bank of Zimbabwe governor, John Mangudya yesterday said the maximum withdrawal limit for bond notes per day is $50, which means if the bank was giving $100, then the bank can give up to $150.

“Bond notes are supplementing what banks were already doing, not substituting,”he said.

Sources in the banking sector yesterday queried the central bank’s decision to introduce bond notes, whose features they were unaware of, saying they were unsure on the modalities of how the currency would work.

RBZ sprung a surprise on Saturday when it announced the introduction of bond notes, which went into circulation today.

In separate interviews yesterday, NewsDay established that the central bank called bankers on Sunday to go to the RBZ cash depot to collect bond notes without any prior meeting on how the notes would work.

“We took the money and distributed to the branches today (yesterday). The branches did not know how the money was to be distributed,” one banker said on condition of anonymity.

Sources said there was a lot of confusion, as bank tellers needed to understand the features as well as communicate them to the depositors.

“We are sure that people are going to hold on to their US dollars, and we are not sure if we will continue receiving deposits,” a banking source said.

Some banks were issuing out $50 in bond notes and others $50 in United States dollars.

Mangudya said: “There was no ambush at all. That’s normal standard process of introducing new notes. Banks were advised on Sunday.”

Local economist, Prosper Chitambara said the lack of clarity was a big problem and the way the bond notes were introduced was shocking.

“The emergence of the parallel market is certain because the market cannot support 1:1 with the US dollar currency, as it is a loan,” he explained.

Some supermarkets were yesterday refusing bond notes, as they said they were not aware of the features and needed time for their workers to acquaint themselves with the new currency.

The central bank introduced bond notes yesterday and said depositors should get a maximum of $150 bond notes per week.

The bond notes are said to be backed by a $200 million loan facility from the African Export Import Bank.

COMMENTS

WORDPRESS: 9
  • comment-avatar
    Joe Cool 5 years ago

    The biggest confusion I have, is why are these Zim dollars being handed out to the public, when they are allegedly supposed to be a bonus incentive given to exporters?

    Give us a straight answer about the connection, please, Mr Governor.

  • comment-avatar
    Morty Smith 5 years ago

    Joe you know the answer. The connection is that they like printing money

  • comment-avatar

    I hear they’re trading at 3 to 1 already….

  • comment-avatar
    MICHAEL BEE 5 years ago

    Hhhhh

  • comment-avatar

    Here we go again !!!! Massive world record breaking inflation …… again ! I cannot believe the stupidity of these guys.

  • comment-avatar
    Clemency Sibanda 5 years ago

    As much as bond notes are not the best option for trading purposes but they can not be equated to the bearer’s cheques which were used before the multi currency system. The bond notes are not a stand alone currency. Therefore for people to allege that the introduction of bond notes is tantamount to the introduction of Zim dollar through a back door borders on mischief because the basic fundamentals of a stand alone currency are not there to sustain it simply because there is nothing to back it up as the country does not have any foreign currency reserves. If as a nation we seriously want to address our monetary problems we need to separate issues. That is the role of Governor of the Reserve Bank and the issues governance or misgovernance. My debate starts here.

    • comment-avatar
      Joe Cool 5 years ago

      The notes are a de facto introduction of the Zimbabwe dollar through the front door – anything that says on it “Reserve Bank of Zimbabwe” and “two dollars” is 2 Zimbabwe dollars.

  • comment-avatar
    nelson moyo 5 years ago

    Zimbabwe’s central bankers never learn – Bond note
    United States based economics professor, Steve Hanke, who was one of the biggest critics of Zimbabwe’s bearer cheques during the country’s hyperinflationary era ( 2008), wrote on Twitter this week: “I warned Kupukile Mlambo of RBZ in May that Zimbabwe bond notes would create chaos. The RBZ is learning the meaning of chaos.”
    Mlambo is one of the two deputy governors at the RBZ.

    • comment-avatar
      Joe Cool 5 years ago

      Don’t fool yourself – they know exactly what they are doing – dealing with Zimbabweans.