BOND NOTES SHOCKER Forex dealers ‘exporting’ notes Foreign businesses not banking US dollars

by Sunday News Online | Sunday, May 14, 2017 | 7352 views
John Mangudya

John Mangudya

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.”

 

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  • Zarura Zimbabgwe

    2.2 million jobs, booom!?

  • george

    When you deposit $3 000 it then takes 10 weeks to get it out of the bank, and the bank fees will be $38. You will waste 20 or more hours queuing, and pay for the joy of getting your own money. That is why no one wants to bank cash.

  • Orange

    So the whole idea of bond notes was not a solution to cash.shortages. So they can be exported to neghbouring countries easily. I think the best thing to do is to withdraw them and encourage the use of pos machines and mobile money. The notion that the bond notes are tobaco farmers money is just silly and cheap politicking. We have not heard of money being stolen from the tobaco auction floors. Encourage the farmers to have bank cards. Farm workers can also be paid by mobile money instead of cash. Inputs can also be paid for using the same method.

  • Mr Bee

    nonsense

  • denzel

    The number one culprit shipping money out is none other than the one at the top. He is always in Asia every weekend.

  • Justice

    What you are calling indiscipline, Dr Magundya, are innovative ways by the jobless millions to support themselves. That must tell you what needs to be done to end it.

    • vusumuzi

      Very Innovative , more Innovativew than the Imbeciles employed at RBZ, including Magunda !!!! who couldn’t forecast that we would do this. Survival Instinct,its called. ZANU is even surprised that the people it Milks and Steals from, and even Rob in Daylight , still walk and live !!!. Today the Zimbabwean Lives Day by Day without even a bit of Govt Assistance, being asked to fork out USDs in a totally zero Employment country. So the Bonds do come back to Zim , since they are sold to returning residents, so where is the problem there ??????. The problem is on the USDs spent by Mgabe to get eyes treated overseas, obaba bethu bona amehlo abo ke ??

  • Hermish Dunga

    RBZ,Mangudya and Zimpaper should be ashamed of reporting this rubbish,when they introduced the bond papers against the will of the general populacy,they were really aware of the end result,they must never pretend to be ignorant,they must carry the cross

  • Bayethe muzukulu

    Mangudya, you guys should be ashamed.i never counted you as smart then and don’t count you as smart now. Zwana you were a chancer then and still are. Why are you lying on behalf of a failed state killed by a multi degreed brainless wilting inedible biltong calling itself president?who exports valueless papers? In any case ask yourself this: how come America has no bond notes yet it’s hard currency dollars circulate higher volumes outside USA than within….even the thick will one day know your true colours.

  • Danny

    But you also find currencies of other countries inside our borders.