ZIMBABWE has issued its own currency for the first time since 2009 to try to ease biting shortages of the US dollar, with banks starting to issue the new currency, called bond notes, (today) Monday.
The new bond notes sparked a mix of hope and apprehension among a population desperate for a solution to the cash crisis but also skeptical of the ability of President Robert Mugabe’s government to manage a currency.
However a Harare-based economic consultant John Robertson says the introduction of bond notes could lead to shortages of commodities and price hikes.
“Anyone who needs foreign currency for imports will have to go to the black market. Inevitably the bond notes will lose their value and it is back to the Zimbabwe dollar scenario,” he says.
In 2008 and 2009 the state’s central bank printed so much of its currency, the Zimbabwe dollar, that the country experienced mind-boggling hyperinflation that reached 500 billion percent, wiping out people’s savings and pensions.
This brought about resistance from Zimbabweans including those in the Diaspora.
The inflation was only brought under control when the government abandoned the Zimbabwe currency and began using the US dollar and several other foreign currencies as legal tender.
But this year the government has not had enough US dollars to make timely payment of the salaries of civil servants, police and army. Banks have been so short of the US dollar, which has seen people even having to sleep outside branches in the hope of getting a few dollars.
“I am happy that I have finally got some cash after days of sleeping in a bank queue,” says Harare resident Tenson Tigere who received a combination of bond notes and US dollars from his bank.
“At the same time I am not sure that these bond notes are the solution. They might soon become worthless just like the Zimdollar,” adds Tigere who go $40 in bond notes and $10 in greenbacks.
Meanwhile reports from Harare says major retails shops like OK, Pick& Pay are rejecting the bond notes.
The Reserve Bank of Zimbabwe, says the new notes will come in $2 and $5 denominations, though it only issued the $2 notes today with the $1 bond coins already having been in circulation.
The currency is pegged at par with the US dollar and is backed by a $US200 million bond facility with Afreximbank, saYs the RBZ.
Some vendors readily accepted the new currency but said they are cautious and will stop if the notes begin to lose value. – AP additional reporting by Patience Rusere