Bond notes in mixed debut

By mid-afternoon, airtime vendors and informal traders– selling products ranging from fruit to umbrellas in wet Harare and Mutare — were accepting the new notes, as were public transport operators.

“We accept bond notes, that is the money we have now so we have no choice but to accept it. Otherwise we will lose customers,” said an airtime vendor on Harare’s First Street.

Amid the din at the teeming Fourth Street bus terminus, vendors could be heard battling to outshout each other: “We take even bond notes!”

A similar scene was observed at Mutare’s Sakubva market.

“We have no choice, money is money,” says a man who only identifies himself as ‘fireman’ — the name given to scores of young men who shout themselves hoarse in a bid to draw the attention of potential buyers.

In Victoria Falls, our correspondent reported that some customers were refusing change in bond notes.

Indeed, one of the fears among the transacting public is that the bond note may not hold its peg for long, with an increasingly rare US dollar once again opening up thriving black market trade for the scarce greenbacks.

Our Bulawayo correspondent reports that the city’s infamous ‘World Bank’ was already discounting the bond note by as much as 20 percent.

“Ospatheleni (money changers) are offering 80 US cents to one bond note, while fuel retailers also have different prices for the bond notes and US dollars,” a witness said.

However, in Harare, several street currency traders did not report any trade yet.

“We have no (exchange) rate, but I’m sure it cannot be 1:1,” one trader, who operates from the Eastgate mall in downtown Harare, said.

Analysts and critics of the bond notes believe the currency could buckle under pressure from demand for increasingly short US dollars in Zimbabwe’s import-dominated economy. As such, how the central bank manages its US dollar priority allocation mechanism for vital, import-dependent industries such as the fuel sector, is going to be key in determining whether the bond note holds its value.

Even before the introduction of bond notes, there were rumblings within the fuel retail industry over delays in processing payments for petroleum imports due to the central bank’s restrictions, resulting in frequent stock-outs.

Although the government has moved to allay fears of extended shortages, several fuel retailers in the capital ran out of supplies over the weekend, a situation which spilled over into the new week.

Fuel retailers surveyed in Harare today were holding off accepting bond notes, with many of them citing lack of familiarity with the new currency’s features.

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