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Zimbabwe Bond Notes

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Zimbabwe Bond Notes
Zimbabwe Bond Notes
Bond Notes Specimen.jpg
Bond Notes Speciment Leaked 26 November 2016.
Central bank Reserve Bank of Zimbabwe
 Website www.rbz.co.zw
User(s) Zimbabwe
Subunit
Nickname Bond Notes, Zim Dollar

Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were released in January 2017. The total value of the notes are said to be backed by the same $200 million Africa Export Import Bank (AFREXIM) facility that is backing the Bond Coins.

Presidential Decree 31 October 2016

Zimbabwean former President Robert Mugabe side-stepped the parliament to issue a decree clearing the way for the introduction of "bond notes" on 31 October 2016. Mugabe used his presidential powers to amend the Reserve Bank of Zimbabwe (RBZ) Act, designating bond notes as legal tender that will be equivalent to the U.S. dollar, according to an official government notice. Mugabe said bond notes "shall be legal tender in all transactions in Zimbabwe" just like the U.S. dollar, British sterling pound and South African rand, which are also used in the country. Previously, the Bond Notes had been referred to by the government as a surrogate currency.[1]

Fake Bond Notes

On 3 November 2016 Finance minister, Patrick Chinamasa announced that fake Bond Notes had been printed to coincidentally release when the real bond notes are injected into the economy by some unscrupulous people. He did not mention who these people were.

“You may not be aware of this but fake bond notes have been printed to coincide with our release in order to confuse the situation. You may also need to know that some people have been going to the people where we put orders for printing and threatening litigation and bad publicity. Because we have reputational issues, every threat is considered valid, which is why we are no longer giving a running commentary on what we are doing.[2]

A few days later, RBZ Governor Mangudya refuted the claims by Chinamasa saying that he had been quoted out of context as there were no fake bond notes printed.[3]

Why Bond Notes

The Bond Notes, at the time were said to be introduced to help ease the cash shortage in the country that was prevailing at the time. The Cash shortage came about as use of the South African Rand reduced (due to the weakening of the SA Rand following a downturn in South Africa's economy) causing an increased demand on the US dollar. Zimbabwe had no currency of it's own at the time after having started to accept "multi-currencies' in 2009 following hyperinflation.

Anti-Bond Notes Sentiments

The introduction of the Bond Notes was widely viewed skeptically by Zimbabweans as it was seen as a return to the Zimbabwe Dollar dollar days of Hyperinflation.

On 3 August 2016, Zimbabweans, including unemployed graduates gathered to present a petition to the Minister of Finance, Patrick Chinamasa in protest against the introduction of Bond Notes. The march that followed the presentation of the petition unfortunately turned violent after riot police attacked peaceful protesters.

Cancellation of $10 and $20 Notes

In early March 2017, the Reserve Bank Governor, John Mangudya, would announce that they were not working on introducing a higher denomination to the $5 that was in circulation at the time.[4]

Bond Notes Adverts


The 26 November RBZ Statement can be downloaded here in full.

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References

  1. MacDonald Dzirutwe, Mugabe decrees regulations paving way for bond notes, Reuters, Published:Nov 1, 2016, Retrieved: 1 Nov 2016
  2. Bianca Mlilo, Counterfeit bond notes printed, The Herald, Published:4 Nov 2016, Retrieved: 8 Nov 2016
  3. Mangudya denies Chinamasa’s claims of fake bond notes. Says his boss was referring to ThisFlag bond notes, Pindula News, Published:7 Nov2016 , Retrieved: 8 Nov 2016
  4. Gift Phiri, RBZ rules out $10, $20 bond notes, Daily News, Published: 5 Mar 2017, Retrieved: 9 Mar 2017