Bond notes circulation starts tomorrow

Local banks will start issuing bond notes tomorrow, the Reserve Bank of Zimbabwe (RBZ) announced yesterday.

The currency that is at par with the United States dollar has divided opinion in Zimbabwe amid a flurry of lawsuits to stop it, but the announcement by the RBZ showed that the government was determined to push through the currency reforms.

"The bond notes will be released into the market through normal banking channels in small denominations of $2 and $5," said the RBZ in a statement.

The move to introduce the notes also renders a parliamentary public consultation process academic as whatever input Zimbabweans make will not stop the operation of the currency, which economists and the general populace has described as a recipe for disaster.

"The initial release of bond notes shall be in an amount of $10 million in denominations of $2 and $2 million in $1 bond coins," the central bank said.

The RBZ said features of the notes would be released simultaneously with the physical money.

"The banking public is advised that no new accounts will be opened as the bond notes would be deposited into existing US dollar accounts," the central bank said.

"In line with the bank's thrust to promote a cashless society through the use of plastic money, withdrawal limits of bond notes have been set at maximum of $50 per day and a maximum of $150 per week."

The RBZ said the withdrawal limits were in tandem with its objective to release bond notes into the market on a measured basis, which was critical to mitigate against abuse of bond notes.