RBZ reveals bond note denominations

The Reserve Bank of Zimbabwe says at least $75 million worth of bond notes will be in circulation by December, but will only be issued in smaller denominations of $2 and $5 to allay public scepticism.

According to media reports, the notes will be released into the economy at the end of October in support of an export incentive scheme which the central bank announced in May.

The bond notes are backed by a $200 million African Import and Export Bank facility.

In May, the RBZ introduced the performance-related export bonus scheme of up to 5 percent to enhance productivity and promote exports with the overall aim of lubricating the economy.

RBZ reveals bond note denominations

The funding mechanism of the export incentive scheme will be through bond notes to preserve the offshore $200 million facility that backs the bonus scheme.
The bond notes also become an anti-money laundering tool.

However, there have been concerns this initiative is a reintroduction of the Zimbabwe dollar through the back door.

The bond notes, which will only be usable in Zimbabwe, will complement the basket of foreign currencies that the country is using which include the United States dollar, the South African Rand, Botswana Pula, Indian Rupee and Japanese Yen.

But RBZ governor, Dr John Mangudya said the misgivings of a few groups would not dissuade the authorities from introducing a policy that was beneficial to the economy.