Business / Local
$6 million worth of Zimbabwe bond coins trigger widespread cheer
28 Nov 2015 at 10:35hrs | Views
Zimbabwean policymakers have revealed plans to pump $6 million worth of bond coins into the national economy, triggering widespread cheer.
Reserve Bank of Zimbabwe governor John Mangudya introduced the new "bond coins" in December last year.
They are named after a $50 million bond that was floated to mint and import them from neighbouring South Africa.
The coins have retained the same denominations and value as US cents but can only be used in Zimbabwe.
Finance minister Patrick Chinamasa said in the 2016 national budget statement on Thursday that the Central Bank would inject more bond coins into the financial system, in a bid to boost a silver-coin market in the grip of an unprecedented supply squeeze as Zimbabweans reject Rand coins over weakening value.
"To date, the bank has issued about $13,567 million worth of bond coins in various small denominations and more coins will be provided in line with demand developments," Chinamasa said.
"Already, additional coins worth $6 million have been ordered."
Government introduced bond coins to replace the lollipops, chewing gum and pens that were now being used in lieu of change for transactions in shops.
"The bond coins have proved popular, and have resulted in the reduction of prices, particularly in the lower end retail sectors," Chinamasa said.
Demand for bond coins has also been rising, following the continued depreciation of the South African rand, whose coins had dominated lower-end transactions since the adoption of multiple currency system in 2009.
The public accesses bond coins from the Central Bank through banks.
"In order to improve distribution, the Reserve Bank will announce in its monetary policy statement arrangements to broaden the interface to also embrace other bulk customers, to include retailers, transport operators, among others," he said, adding that this was set to eliminate the current scenario where the travelling public often resorts to purchase bond coins from street "money vendors."
Reserve Bank of Zimbabwe governor John Mangudya introduced the new "bond coins" in December last year.
They are named after a $50 million bond that was floated to mint and import them from neighbouring South Africa.
The coins have retained the same denominations and value as US cents but can only be used in Zimbabwe.
Finance minister Patrick Chinamasa said in the 2016 national budget statement on Thursday that the Central Bank would inject more bond coins into the financial system, in a bid to boost a silver-coin market in the grip of an unprecedented supply squeeze as Zimbabweans reject Rand coins over weakening value.
"To date, the bank has issued about $13,567 million worth of bond coins in various small denominations and more coins will be provided in line with demand developments," Chinamasa said.
Government introduced bond coins to replace the lollipops, chewing gum and pens that were now being used in lieu of change for transactions in shops.
"The bond coins have proved popular, and have resulted in the reduction of prices, particularly in the lower end retail sectors," Chinamasa said.
Demand for bond coins has also been rising, following the continued depreciation of the South African rand, whose coins had dominated lower-end transactions since the adoption of multiple currency system in 2009.
The public accesses bond coins from the Central Bank through banks.
"In order to improve distribution, the Reserve Bank will announce in its monetary policy statement arrangements to broaden the interface to also embrace other bulk customers, to include retailers, transport operators, among others," he said, adding that this was set to eliminate the current scenario where the travelling public often resorts to purchase bond coins from street "money vendors."
Source - dailynews
