Monday, 28 November 2016

SHOPS REJECT BOND NOTES IN EARLY TRADE


Zimbabwean supermarkets rejected the newly-introduced bond notes in early trade on Monday, despite banks offering the local currency to depositors and excitement on the streets of Harare.

The Reserve Bank of Zimbabwe (RBZ) introduced the bond notes to the market on Monday and banks started distributing them through formal channels. The banks were offering mostly $2 notes (in bond notes) and $1 (in bond coins), with the new currency supposed to have equal value to the US dollar.

But despite the excitement on the streets and ready acceptance by vendors, the big supermarkets in Harare – including Pick n Pay and OK Zimbabwe – were not openly willing to accept the bond notes that will also come in $5 denominations, at least for now.

“We are waiting for specimens and samples from the Reserve Bank. Maybe we will start accepting the bond notes in the afternoon when we receive the samples,” a manager at an OK Zimbabwe supermarket in Harare told shoppers intending to buy goods using the bond notes.

At Pick n Pay and TM Supermarkets branches in central Harare, the bond notes were also not being accepted. A supervisor told Fin24 that the shop was “yet to get approval to accept the bond notes”.

However, most shoppers in Pick n Pay supermarkets were using bank cards to purchase goods and commodities, while some were using US dollars in cash and local bond coins that have been in circulation since the beginning of last year.

The Reserve Bank said at the weekend it had engaged and agreed with the Retailers Association of Zimbabwe, fuel companies, representatives of the various business associations and the Consumer Council of Zimbabwe on the use and acceptability of bond notes as a medium of exchange in the country. 

On the streets of Harare, airtime vendors were accepting the bond notes and one trader said he had now received about $4 from airtime credit sales. Economists said it was still too early to give an assessment on the acceptance and ease of transacting using the bond notes.

Economist John Robertson said it would take some time "to get a clearer picture", although bank cash queues were still long, especially at local banks. Zimbabwe is battling a cash crunch that has seen foreign currency dry up, and the central bank says it has introduced about $10m in the local bond notes.

The RBZ has battled to explain the bond notes - which the government says are local currency backed by a $200m facility from Afreximbank - to restive Zimbabweans, who are sceptical after the country’s economy tipped into hyper-inflation in 2008.

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