Accessibility links

Breaking News

RBZ Chief Says Bond Notes Not for Easing Acute Cash Shortages

An unidentified man shows dirty one dollar notes before washing them in Harare, Zimbabwe. The washing machine cycle takes about 45 minutes and George Washington comes out much cleaner than before in Zimbabwe-style.

The governor of Zimbabwe's central bank, Dr. John Mangudya, has denied that the soon to be introduced bond notes is a response to the country's crippling cash shortages, saying “it is an incentive for exporters.”

Mangudya told AFP-TV that only bond coins introduced in 2014 were designed to ease problems of change in a nation currently using multiple currencies after dumping its own currency in 2009.

“The purpose of bond notes is to deal with an incentive for exporters but I think now people are confusing that the bond notes are coming here to cater for cash shortages. No. There is no relationship. This is an export incentive scheme.”

Initial reports from the governor’s office indicated that the bond notes were set to also ease cash shortages. Critics say the governor is now flip-flopping on this issue due to political pressure and fears of violating the Zimbabwe’s constitution.

He told Reuters on Tuesday that the central bank would no longer convert half of all export earning to euros and rand, backtracking from partial measures introduced last week to ease acute shortages of dollars.

All this has been met with condemnation from opposition groups. MDC founding president Morgan Tsvangirai’s party does not like what the governor is doing.

Tsvangirai told an international television station that these short-term measures don’t make any economic sense.

“You can rig the elections but you can’t rig the economy precisely because this response is a reincarnation of the very same things that they will go back to which is reviving the bond notes as a short term measure … It becomes a permanent measure but it does not make economic sense.”

The central bank governor will on Thursday respond to Zimbabweans’ concerns over the constitutionality of the bond notes. Don’t miss it!! Here on Studio 7.