'Bond notes start circulating next month,' says Mangudya

Reserve Bank of Zimbabwe Governor Dr John Mangudya has allayed fears that government is trying to bring back the Zimbabwe dollar through the back door by introducing bond notes saying it is a measure to incentivise exporters and to improve on production.

Dr Mangudya, who was addressing a Zimbabwe National Chamber of Commerce breakfast meeting at the Harare International Conference Centre in Harare this Thursday morning said bonds notes will definitely be in circulation next month.

He said the notes will be in $2 and $5 denominations.

The central bank governor said awareness campaigns on the bond notes will start on the 31st of this month across the country.

Dr Mangudya says usage of the South African rand as a national currency is out of the question since Zimbabwe is not a member of the rand monetary union which has countries such as Lesotho, Swaziland and Namibia.

The coming of bond notes has created debate with some stakeholders advocating for the adoption of the South African rand which Dr Mangudya indicated that it is a process, hence cannot be done overnight since it requires introduction of local currency to back the rand.

The reserve bank governor also said measures will be put in place to counter a hyper-inflationary economic climate adding that is the reason why the bond notes are in smaller denominations.

With the current rate of exports, the US$200 million Afreximbank facility will be exhausted when exports hit US$6 billion mark and the bond notes will be introduced in the market gradually to ensure scarcity of the notes.

The introduction of the five percent exporters' bonus scheme is also meant to stimulate export production which is critical for economic growth.