Counterfeits dampen bond notes confidence

Finance minister Patrick Chinamasa's allegations that counterfeit bond notes are already in circulation dampens public confidence in the pseudo-currency, analysts have said.

Addressing guests at a budget seminar in Bulawayo last week, Chinamasa said counterfeit bond notes were already being printed by unscrupulous people bent on scuttling their acceptance by the public, yet even specimens of the bond notes have not yet been availed to the public.

"That story is a negative story and it doesn't help build confidence in the bond notes. Such claims actually fuel fears. The public is already afraid and suspicious of the bond notes and such stories make it worse," the analyst said.

Former Finance minister Tendai Biti said such revelations by Chinamasa confirmed that Zimbabwe was now a banana republic.

"Nobody has ever seen them and he [Chinamasa] says there are counterfeits [being printed]. We know what these people [Zanu PF] are capable of doing," he said.

"How do you have counterfeit notes when the notes have not been released onto the market?"

Meanwhile, Mangudya dismissed as untrue claims by Chinamasa that counterfeit bond notes were already being printed. The RBZ governor said this on the sidelines of a pre-budget seminar in Bulawayo yesterday.

Bond notes have failed to win the confidence of the public ahead of their release this month.

Central bank governor John Mangudya is on record saying there would be an independent board that would monitor the printing of bond notes. The board has not even been appointed.

The central bank began awareness campaigns last week to provide information to the public ahead of the launch of the bond notes.

In September, Mangudya said he would introduce bond notes in denominations of $2 and $5 which would be at par with the United States dollar. He said the bond notes would be backed by a $200 million facility guaranteed by the African Export-Import Bank.

Zimbabweans fear the bond notes, which they liken to the Zimbabwean dollar which was retired last year. The local currency evokes memories of hyperinflation in which locals lost their savings.