No more Zimbabwe bond notes for now: Bank governor

2017-04-23 19:26
John Mangudya (File: AFP)

John Mangudya (File: AFP)

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Harare - Are you hoping for respite from Zimbabwe's cash squeeze?

It's not coming any time soon if Zimbabwe's central bank governor John Mangudya is to be believed.

Mangudya told the state-controlled Sunday Mail that the bank has decided "not to continue issuing out new bond notes into the market".

That's despite the fact that the limit the authorities set for the total number of new "bond notes" has not yet been reached.

In 2016, the limit was set at $200m. But only $121m worth of the new notes have been released. (Although there's some confusion over that figure: Mangudya has also talked about $130m worth of bond notes being already in circulation.)

Unusual to see US bills

Bond notes are a special-to-Zimbabwe currency that were introduced in late November amid wide fears they would spark inflation and a return to the dark days of the last hyper-inflationary crisis, which peaked around 2007 - 2008.

Bank queues, however, have persisted, particularly in the weeks surrounding civil servants' pay days, as banks limit withdrawals.

These days it is unusual to see real US bills on the streets or in shops. But even bond notes are not easy to get hold of.

Electronic 'zollars'

The authorities want Zimbabweans to use bank cards but there are fears that the "zollars" being transferred electronically are not backed by deposits.

Vendors and many small stores do not have point-of-sale devices, and doctors and service providers may often still want hard cash.

Mangudya, who's staked his career on the success of the bond notes in curbing what he sees as the incessant drain of hard cash from Zimbabwe's squeezed economy, said the decision not to up the number of bond notes is due to the behaviour of "bad characters" who've been hoarding cash.

Bad characters

"Since last year... we have suffered due to some detractors who have bad intentions of hoarding and externalising cash in a bid to destabilise our recovery framework but we won't fold hands to leave them to do as they will," Mangudya was quoted as saying.

Three companies were charged this month for not banking their cash since June 2016, the paper reported.

Read more on:    john mangudya  |  zimbabwe  |  southern africa

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