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

by Sunday News Online | Sunday, Nov 27, 2016 | 9398 views
John Mangudya

John Mangudya

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.

— @irielyan

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  • GAVUNA

    Limiting withdrawals creates more harm than good and this will increase frustration among the general public. What you are doing Mangudya is pretty good because you are prescribing 2018 election results. Lets have more disastrous policies from your office in 2017. Remember what the situation was like during 2008 elections? You will see a repeat of those results. Keep it up gavuna.

  • Mendeka

    This is truly destructive as our economy ewill not recover but sink deeper. These destructive policies by authorities who are so selfish that they shun sound advices,will never improve a our lifestyles but destroy whatever was left. These authorities will continue blaming sanctions and the West for their deliberate failures. The population is forced into sponsoring the ZANU-PF monster.

  • The Analyst

    Balancing Rocks vs Balancing economy

  • Lux

    The wait is over ,you scream!…for who???I am one of those dreading what this will do to us and ever sinking economy! Nxx

    • big

      Ya as if the author is announcing something that would excite the public…

  • Ziyabheda

    And here begins the parralel market for the usd. Individuals wishing to travel but cannot get the usd from the bank will be prepared to trade the bond note at any reasonable price in order to get the USD. Does the 150 weekly limit apply only to the bond note or cash withdrawal in general? If it is bond notes only how will the bank know since the account will be the same as the original usd? And how does this address the liquidity issue? Please clarify to us some of these issues!

  • N. Sithole

    The last nail on the coffin for our economy. The effects will be worse than the 2008 Gonomics era. Fuel dealers are demanding usd cash in order to restock. Those fuel queues of yesteryear will be back. Shelves will soon be empty. I hope the governor has started drafting his resignation letter as per his pledge that he would resign if things did not work out. The observation that what we learn from history is that people never learn from history is instructive.

  • Martin Kenny

    The old English adage of a drowning man clutching at straw holds very true here. Bond notes are the straw that will not save the economy from drowning. The value of a currency depends on the faith put into it by the citizens not on coercion by the authorities. Introduction of bond notes is mass rape of the citizens by the monetary authorities. The scary issue here is when you mix bond notes and US dollars in the same account what do you end with? It will not work. I will put my US dollars under the pillow and bond notes into the bank.

    • N. Sithole

      An apt observation. Effectively, all usd accounts have been converted into bond note accounts except those of chefs.

  • madiba

    just printing money and force people to accept lt is not enough. it defies the fundamental xristics of money as a legal tender.we have learnt a lot of economics since 2008. i hope we will all graduate with masters

  • zimbotry

    Can I pay the Police at roadblocks with them. I bet I cannot

    • mpengo

      By all means do so!

      If they refuse, take note of the badge number, request a ticket and inform him/her/them what you’re going to do concerning refusal to accept legal tender according to the Reserve Bank of Zimbabwe Amendment Act 2016

  • Bondose

    Why should ordinary people be subjected to withdrawal limits be this old man at the top withdraws big amounts of cash why should ordinary people be subjected to be told what to do