Zimra, RBZ act on bond notes leakages

The Reserve Bank of Zimbabwe (RBZ) is engaging the Zimbabwe Revenue Authority (Zimra) to institute stringent controls at the border posts to plug the leakage of bond notes into neighbouring countries.

This comes after it emerged that large sums of bond notes are being spirited out of the country by individuals and companies that are speculating on the surrogate currency introduced in November last year.

Zimbabwe is currently in the throes of a biting liquidity crisis.

Cash shortages have emerged, as a result, with bond notes increasingly becoming scarce after finding new homes in neighbouring countries such as Botswana, South Africa, Zambia and Mozambique.

This is forcing local banks to give depositors bond coins whenever they make withdrawals.

With over $160 million bond notes in circulation, the surrogate currency has been steadily vanishing from the local market on the back of currency dealers who are either hoarding them for speculative purposes or taking the surrogate into the black market.

RBZ financial markets director, Azvinandawa Saburi, told delegates at the on-going Zimbabwe National Chamber of Commerce conference that the central bank along with Zimra were implementing stricter searches at the country's entry ports to reduce seepages.

"...We will address it (the leakage of bond notes) administratively with Zimra to ensure that there is stricter vetting at our entry points, in the same way that foreign exchange is monitored when people leave the country," Saburi said, in response to a question from a delegate.

The delegate had revealed that on a trip to South Africa, as customs officials asked him to declare all the foreign exchange he was taking outside the country, they did not care about the bond notes he was taking out.

As reported earlier by the Daily News, large amounts of bond notes are being traded at a premium in neighbouring countries where there is heavy flow of Zimbabweans leaving travelling to.

The parity of the notes — which are officially pegged at par with the United States Dollar — has made the currency attractive in the region where relatively weaker currencies trade.

"As the central bank we feel that ours is a job to regulate and so we work with other statutory boards to address matters like this one…

"And that is the path we will take and ensure the issue is addressed," Saburi said.

His remarks come as RBZ deputy governor Kupukile Mlambo recently admitted the bond notes had seeped into the region.

Noting that cross border traders were responsible for taking bond notes across the border, which he said were a more "stable" currency compared to the South African Rand, Mlambo said government needed to establish incentives to ensure that bond notes return to the local market.

"I have heard bankers say there are a lot of bond notes outside, but we have got to establish how much they are.

"In general, getting bond notes to South Africa is not illegal because I am allowed to carry $1 000 in cash. Unless the amounts are big, the Zimra guys will not stop you from carrying, so you are allowed to carry that," Mlambo said.

The RBZ recently said, on average, a review on the current liquidity balances of banks, showed that between two and three percent of bond notes and coins were in financial institutions' vaults.