More bond notes coming!

THE Reserve Bank of Zimbabwe (RBZ) will release the second batch of $2 bond notes amounting to $7 million this week in fulfilment of the Government's drive to improve liquidity in the economy and incentivising export oriented domestic production.

The Government has also said it was interrogating banks on continued withdrawal limits after the release of the first tranche of $10 million bond notes last week.

The injection of $7 million brings the amount of #bondnotes disbursed into the market so far to $17 million, RBZ Governor Dr John Mangudya said in a statement yesterday.

Bond notes started circulating on Monday last week and have been well received by the market despite negative perception by pessimists and opposition party leaders.

"In line with the strategy to release the bond notes on a measured or drip-feed basis, the bank would like to advise the public that it is releasing the second batch of $2 bond notes amounting to $7 million this week. This brings the total amount of bond notes disbursed to $17 million against a value of $70 million payable to exporters of goods and services under the export incentive scheme," said Dr Mangudya.

He paid tribute to the transacting public, consumers and the business community for embracing bond notes following the release of the first batch of $10 million new notes on Monday 28 November 2016.

"The bank remains indebted to all the business organisations in Zimbabwe, large and small, that made the introduction of the bond notes a success," said the Governor.

"The bond notes are of high quality with many security features to make them secure. The rubbing off of ink and the variation of the security thread on the notes are quite normal."

Dr Mangudya said the $5 bond notes would be released into the market in due course. Going forward, he said the apex bank would continue to publicise information on the release of bond notes into the market in order to uphold its commitment to transparency.

Bond notes are expected to help ease US$ banknote shortage and curb externalisation of foreign currency. The new notes trade at par with the US dollar and can be used for any transaction within Zimbabwe.

The RBZ has said it would release a total of $75 million worth of bond notes by the end of this year, out of a total of $200 million-backed loan facility from Afreximbank.

Bond notes have gained acceptance despite being criticised by a sceptical public who viewed their introduction as a scheme to return the Zimbabwean dollar, which was abandoned in 2009 when the country adopted the multiple currency system.

Long queues continue to be witnessed at banks as financial institutions maintain a $50 withdrawal limit per day. Some depositors in major cities such as Bulawayo are even spending the night on queues in order to be served first.

In view of this members of the House of Assembly asked Vice President Emmerson Mnangagwa, who is the leader of the House on why the introduction of bond notes has not resulted in easing of cash shortages.

In response VP Mnangagwa said the cash shortage was being addressed from both policy and administrative basis. He said the release of the second batch of bond notes was expected to improve the cash situation.

"We are going to add more bond notes and this should address the issue of long queues at banks. We are very concerned about the queues that we see at banks and it is not Government policy that people should queue. That must be resolved," said VP Mnangagwa.

He said Government wanted to find out why banks were limiting withdrawals.