US dollar note trade rages as Zimbabwe braces for ‘surrogate currency’

A Reserve Bank of Zimbabwe (RBZ) statement hit email inboxes across the country’s newsrooms just after 3pm yesterday, almost triggering coverage action plans that have been in the works since the central bank announced its intention to introduce ‘bond notes’ — a ‘surrogate currency’ — nearly six months ago.

Depending on where one stands on the highly emotive issue of Zimbabwe’s currency plans, the introduction of the bond notes could trigger an economic Armageddon or lift tortured Zimbabweans to an economic nirvana.

The heightened sense of anticipation in the newsrooms has been caused by central bank governor John Mangudya’s recent announcement, that “publicity campaigns for bond notes will start Monday, October 31, 2016.”

Early yesterday calls to the central bank had elicited what has become the standard central bank response on the issue of bond notes — evasiveness tinged with unnecessary mystery.

So, it was understandable that a central bank email, delivered towards the end of the business day, drove many to the edge of their seats.

But, alas, the much anticipated central bank statement was nothing more than a ‘warning against cash dealings.’

The understated Mangudya, appointed in 2014 to succeed the histrionic Gideon Gono whose decade-long tenure at the central bank will forever be overshadowed by that 100 trillion Zimbabwe dollar note, has frequently spoken about how the Bank has broken with its past.

However, in trying to defend his controversial ‘surrogate currency’ plan, which has become a lightning rod for anti-government sentiment, the embattled Mangudya is starting to sound like his predecessor, who was a serial sabre rattler.

Mangudya’s warning was in response to “some business entities and individuals (that) are reported to be selling cash, at a premium, against (electronic) transfers from the cash buyers’ accounts”.

“Some cash-generating businesses, especially retailers and wholesalers, have not been banking all their cash receipts, as required under the Bank Use Promotion Act [Chapter 24:24]. Instead, they offer the cash to companies and individual, who would make RTGS or inter-account transfers of the equivalent amount, plus an agreed premium, into the cash vendor’s account,” said the RBZ in its statement.

Banks will be required to report all transactions suspected to involve selling or purchasing of cash, the RBZ said, while the central bank’s anti-money laundering unit will increase its monitoring.

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