Tuesday, 22 November 2016

BOND NOTES FEATURES TO REMAIN A SECRET UNTIL NEXT WEEK

THE Reserve Bank of Zimbabwe (RBZ) says it will not disclose the features of the bond notes until they officially start circulating in the market next week.

RBZ Governor Dr John Mangudya said yesterday that due to security reasons the apex bank would not rush to advertise the features of the new notes before their launch.
Bond notes will be released into the market next week as part of an export initiative by the Government to promote domestic production and exports.

The initiative is meant to increase foreign exchange earnings for the country as well as help curb externalisation of funds while improving liquidity. Under the facility exporters will be awarded an incentive of up to five percent of the total export value.

Said Dr Mangudya: “We will only advertise the features of the bond notes simultaneously with their release and this is for security reasons”.

He added: “For example, if we are to reveal before their release that one of their features is brown in colour that threatens the security, which we are supposed to give to the notes before they start circulating.”

President Mugabe has gazetted Statutory Instrument 133 of 2016, which provides the legal framework for the introduction of bond notes as legal tender in Zimbabwe.

As such the Amendment of the RBZ Act empowers the central bank to issue out bond notes using its preferred design, form and material.

The bond notes are being introduced under a $200 million guaranteed Africa Export Import Bank (Afrexim-Bank) facility that Government secured for the scheme.
Dr Mangudya has hinted that bond notes worth $75 million of the $200 million Afrexim Bank would be released by the end of December in $2 and $5 denominations

He has also pointed out that the bond notes were coming in to enhance productivity as an export incentive.

The monetary authority is on record as saying the introduction of bond notes is not a ploy to try and re-introduce the Zimbabwean dollar which was suspended in 2009 when inflation rose to unprecedented levels.

RBZ has urged the public not to adopt a negative attitude towards the introduction of bond notes as they will not be forced on consumers, highlighting it was not an issue of people not wanting the bond notes but an issue of trust.

It is believed that $6 billion worth of exports would be generated after the exhaustion of the $200 million export incentive scheme.

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