Zimbabwe central bank says introduction of bond notes imminent

Zimbabwe's central bank has said the introduction of bond notes early November is on course, with educational campaigns expected to start on October 31.

Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya was quoted by the state-run Herald newspaper on Monday as saying that nationwide awareness campaigns would precede introduction of the notes to ensure people would not be duped by unscrupulous people.

In the meantime, the central bank was importing more U.S. dollar notes -- the main currency in circulation after the country adopted multiple currencies in 2009 -- to ease current cash shortages in the economy, Mangudya said.

Allaying public fears and distrust in the bond notes, Mangudya said the apex bank would not be reckless as to print more notes than are necessary.

Faced with U.S. dollar shortages since the beginning of the year, the central bank mooted the idea to introduce the bond notes which would be on par with the U.S. dollar and backed by a 200 million U.S. dollar African Export Import Bank facility.

At least 75 million dollars worth of bond notes in 2 and 5 dollar denominations would be introduced into the market by December 2016, according to the RBZ.

Government has since said it is working on legislation to back the bond notes, which have raised public concern and uncertainty in the market.

The public fears the bond notes may be a ploy by government to re-introduce the worthless Zimbabwe dollar which was abandoned in 2009 in favor of multiple currencies.

Tax agency ZIMRA said last week the planned introduction of the bond notes had caused uncertainty and exacerbated the cash crunch in the country as people hold on to their dollars.

President Robert Mugabe has said the "surrogate currency" would help stem externalization of the dollar, which he said was highly sought after by people from neighboring countries. Endit