Bond notes to be released gradually

BOND notes will be released into circulation gradually and sparingly to ensure that they retain a critical characteristic of currency - scarcity - the Reserve Bank of Zimbabwe has said.

RBZ Governor Dr John Mangudya told a Zimbabwe National Chamber of Commerce business review breakfast meeting in Harare yesterday that $65 million worth of bond notes would be released next month. The balance making up the $200 million bond notes support facility from the African Export and Import Bank will be released into circulation gradually, until end of 2017.

But Dr Mangudya said while there is a lot of hype around bond notes, focus should rather be on growing production and exports since problems facing Zimbabwe were economic not the impending bond notes.

The bond notes will come into circulation next month after nationwide awareness campaigns, with an initial amount of only $65 million being released into circulation.

Dr Mangudya said the Reserve Bank is fully aware of the need to ensure scarcity and not abundance of money. The bond notes are meant to monetise the incentive of 2,5 percent and 5 percent to the different exporters who qualify for the carrot.

Dr Mangudya said that the release of the surrogate currency into the market will be so gradual and in small amounts some people may not be able to notice it.