Mugabe seeks parliamentary approval for bond notes

The announcement triggered some legal challenges and a series of street protests, including possibly the biggest anti-Mugabe demonstration in a decade, held on July 6 but government hopes the bond notes will resolve a crippling shortage of bank notes.

Central bank governor John Mangudya yesterday told diplomats that the notes would only be available over the counter. 

The  introduction of the bond notes, which have triggered fears of a return to excessive money-printing and hyperinflation, has been held back until “the central bank is satisfied with levels of public awareness of the new currency’s features,” according to Finance Minister Patrick Chinamasa.

The central bank has repeatedly promised not to print bond notes beyond the $200 million backing provided by an Afreximbank facility, insists the bond notes are primarily an incentive for exporters, who will get up to 5 percent of the value of their exports, paid in the local currency.

The central bank says the incentive is targeted at closing a trade gap which has seen the country ship out $20 billion for imports since 2009.

In 2014, the RBZ introduced bond coins, backed by a $50 million AfreximBank facility in a bid to resolve the shortage of small change. Despite initial skepticism and resistance, the coins have gained widespread acceptance and use in the economy.-The Source

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