Zimbabwe issues its own currency called bond notes

According to Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), the bond notes will trade on a par with the us dollar.

President Robert Mugabe’s government says the new currency, which he has described as a surrogate of the United States dollar, is created to curb the smuggling of physical greenback from the informally dollarised economy and boost flagging exports – both major factors cited for a biting shortage of U.S. dollar bills that has seen long lines at the banks since the turn of the year.

Zimbabwe began stocking ATMs on Monday with the new bond notes in denominations of $2 and $5.

The discord was not a result of the incorrect spellings of the words separate and remittances on a billboard that made headlines in the social media circles, but the whole process from the day the government announced its intention to introduce the bond notes all the way up to the eventual injection of it into the economy. “The market will determine the exchange rate”. “Our membership does not have confidence in bond notes”, he said.

A man holds up a 100 trillion Zimbabwean dollar note, in Zimbabwe’s capital Harare, June 12, 2015. “They might soon become worthless just like the Zimdollar”, he said outside a major bank in Harare after he was given $40 in bond notes and $10 in greenbacks.

“At least we will be able to access commodities”.

Government should pass custodial sentences on persons caught on the wrong side of the law and we suggest severe and brutal sentences to send a clear message to anyone who may wish to do the same.

Zimbabwe on Monday added a new “surrogate” currency to the nine already in its multi-currency basket amid mixed feelings from the banking public. Bond coins have been in circulation for more than a year, but until now the largest denomination was 50 cents.

Last week several activists were beaten up and arrested ahead of a planned street protest to oppose the introduction of the notes.

The Zimbabwe economy has been hollowed out by endemic corruption and government policy including land seizures and laws forcing foreign-owned companies to sell majority stakes to locals.

Business groups have welcomed the move as a way of boosting economic growth.

The advert clearly spells the bond notes as being export incentive, meaning some people expected the notes to have been injected into the exporters’ receipts. “It will make the situation worse”.

Advisers to President Mugabe, 92, who has been in power since 1980, warned that the so-called bond notes could cause his downfall if they have the same effect.

Zimbabwe launched a “bond notes” currency that held its value against the USA dollar on Monday, despite warnings that it could cause hyperinflation and suggestions it could bring down President Robert Mugabe. Lewis Mapira, a taxi driver in Harare, told AFP.

Those businesses that have weathered Zimbabwe’s successive economic storms are grinding to a halt as the government repeatedly fails to pay soldiers and civil servants on time. More importantly, local products have become uncompetitive in the region because of the high value of U.S. dollar denominated cost structure. Political opposition and civic organizations say they are planning protests against the bond notes. We rely on imports and the people who import will need real currency.

The secrecy of the Reserve Bank of Zimbabwe (RBZ) around the release of the notes, including its failure to publish security features or say where they are being printed, has heightened fears it will print more than a stated $200 million issuance limit.