Roundup: Alleged printing of fake bond notes jolts Zimbabweans

Zimbabwean finance minister has alleged that fake bond notes are already being printed ahead of the introduction of real ones to create confusion in the market, according to state media on Friday.

The announcement by Finance and Economic Development Minister Patrick Chinamasa jolted many Zimbabweans who are already wary of the new notes and are uncertain about the future of their U.S. dollar deposits.

The Herald reported Friday that Chinamasa told legislators at a pre-budget seminar in Bulawayo that the printers intended to release the bond notes at the same time the Reserve Bank of Zimbabwe (RBZ) releases the new notes to the public.

"You may not be aware of this but fake bond notes have been printed to coincide with our release in order to confuse the situation." he said.

Denominations of 2 dollars and 5 dollars will be the first to be issued and will have a 1:1 value to the U.S. dollar as authorities move to curb cash hoarding, externalization and looting which had been associated with the U.S. dollar.

RBZ said this week that the bond notes would remain in circulation for as long as the country did not have its own official currency.

The central bank said the bond notes would be issued as an export incentive with exporters getting bonuses of between 2 and 5 percent of the value of total export receipts in bond notes.

It assured the public that the notes are not a currency but a financial instrument providing a contractual right to receive or deliver cash.

"Bond notes are not a surrogate Zimbabwe dollar for they are not currency but a financial instrument, issued at par with the U.S. dollar," the central bank said.

The bank noted that when bond coins were introduced in 2014 to deal with small change issues, many people were initially skeptical that they would not maintain their value, which they did.

It also emphasized that it would not print more than 200 million dollars worth of the notes.

While many people remain unsure of their future in an era of bond notes, the Confederation of Zimbabwe Retailers (CZR) urged them to embrace the notes, arguing this will ease the liquidity crunch.

CZR president Denford Mutashu told New Ziana that Zimbabweans should not be disheartened by the coming of bond notes since they would also help local companies boost production.

The bond notes will be redeemable at any bank in exchange for any of the eight multi-currencies in use in the economy, namely the U.S. dollar, South Africa rand, the Euro, Japanese yen, Australian dollar, Chinese yuan, Botswana pula and Indian rupee.

The Zimbabwe dollar became moribund in February 2009 and made way to a multiple currency regime dominated by the U.S. dollar and, in the initial stages, the rand.

While the other currencies have hardly been in use, unsustainable current account and capital account deficits have put pressure on nostro accounts of banking institutions resulting in cash shortages and pressure on the RBZ to introduce the bond notes.

Many are wary of the new notes and hope that the RBZ is not trying to reintroduce the Zimbabwe dollar via the back door.

Economists and the RBZ are advocating greater use of plastic money, with the central bank intending to make 80 percent of monetary transactions to be via plastic money in the next five years.

However, while plastic money has worked in the formal sector, many people are still to accept its reliability especially after previous bank failures which wiped out the accounts of millions of clients. Endit