Imminent bond notes spark Zim banking frenzy

With the introduction of

Zimbabwe’s controversial bond

notes imminent, the local

banks have been flooded by

Zimbabweans desperate to

withdraw their funds in legal

currency, with fears that the

artificial currency could lead to

another bout of hyperinflation.

The last time that this

happened, Zimbabwe

set a world record – with

hyperinflation of more than

231 000 000%.

Despite persistent rumours

that the Zimbabwe authorities

will delay the introduction of

the controversial bond notes,

even to as late as February

or March, John Mangudya,

governor of the Reserve Bank

of Zimbabwe, has just said

they will be out in two weeks,

according to state-controlled

Sunday News.

The report quoted

Mangudya saying: “The bond

notes….will be released….at the

end of this month.”

Zimbabwe’s vice-president,

Emmerson Mnangagwa, added

more fuel to the fire when

he was quoted by the other

government newspaper, the

Herald, saying that these bond

notes would be a currency.

The problem for the banks

is the shortage of foreign

currency, particularly the highly

desirable US dollar, which was

introduced as legal tender –

along with other currencies – in

2009. This has led to the banks

introducing new service terms,

including cash withdrawals

being subject to availability of

funds, and reserving the right

to pay funds in one or more

currencies recognised at that

time as legal tender.

Latest to join the throng of

Zimbabwean bodies fighting

against the bond note is the

Zimbabwe Congress of Trade

Unions (ZCTU), with plans for

industrial action against this

artificial currency.

It has pressed the Zimbabwe

government to instead

adopt the SA rand as an

export incentive, since SA is

Zimbabwe’s biggest trading

partner.