RBZ unveils bond coins

HARARE - The Reserve Bank of Zimbabwe (RBZ) yesterday unveiled a new set of bonded coins worth $10 million, which will start circulating on December 18.

Central bank governor John Mangudya said the introduction of the bond coins on the local market was part of efforts to ease the shortage of change, but allayed fears that they were clandestinely bringing back the Zimbabwe dollar.

"The economics of the bond coins is that they are being introduced to buttress the multiple currency system through the provision of change especially for the US dollar notes which have a smallest denomination in circulation in Zimbabwe of $1," he said.

Mangudya added that the RBZ was, therefore, addressing the divisibility and store of value qualities of money through the initiative, which has already received significant support from the Consumer Council of Zimbabwe, business organisations and financial institutions.

"The bond coins would be at par with the US cents, that is trading one for one with US cents," he said.

The special coins of 1c, 5c, 10c and 20c are part of a five-year $50 million bond that government had secured to give them value.

The 50c coin will be introduced in March next year.

He ruled out the return of the local currency saying that it would be "careless" and economic "suicide" as there were inadequate reserves to anchor it and that the country had foreign currency reserves that could only last up to three months.

"There are no fundamentals to bring back the local currency. We have no appetite to do so, and we can't be careless to do so and we won't do that," he said.

According to Mangudya the initial $10 million coins are equivalent to only two percent of total current bank deposits and would be maintained at below 10 percent.

He noted that under normal circumstances, coins in issue should be equivalent to between 20 and 25 percent of total bank deposits.

At least 30 million rand worth of coins would also be imported to augment the bond coins.

"For transparency and accountability purposes, the Reserve Bank shall ensure that the whole process is subject to public scrutiny and that both the value and quantity of bond coins in circulation are subject to audit by reputable institutions.

"We have already engaged and appraised the Institute of Chartered Accountants of Zimbabwe in this regard," the apex bank chief said.

He also stated that the new bond coins' circulation will be limited to Zimbabwe.

Zimbabwe ditched its local currency in favour of foreign currencies in January 2009 after hyper-inflation reached 500 billion percent.

Zimbabwe mainly uses the United States dollar and South African rand for transactions but businesses usually round-off prices and give consumers vouchers or sweets as change because the country lacks coins.

Comments (10)

This is a joke which I am hearing everyday in the shops as an excuse that there is no change available. I am running CHOW FAST FOOD a small Fast Food business in town we are at First Street and N. Mandela and since we opened up in August we always had change. We went out there and found the change for our customers. Stop the excuses and get change for your customers. Its enough with the stories.

CHOW - 6 December 2014

What bonded coins, Mangunja should not waste resources minting useless coins, bearer coins are as worthless as bearer cheques. The country needs real reforms, political uprightness and the rule of law, not zillions of useless copper/bronze coins !

McAaron - 6 December 2014

Another Gono in the making... printing worthless coins at US$10mil, soon some clever dudes will use the coins to sweep the real US$ notes and out of the country. You will remain with your useless coins and mint more and more until you tell the nation the Z$ is back. If these are the sort of monetary policies that Mr Magunja is enacting disregarding the economic fundamentals I am afraid he is treating the signs of a disease and not treating the disease itself.

garikayi - 6 December 2014

My question is that if I bank 1000 cents on the counter in the bank,will I be able to withdraw the money on the ATM or in the bank as the genuine ten US dollars.Can someone answer me please

John Shava - 6 December 2014

My question is that if I bank 1000 cents on the counter in the bank,will I be able to withdraw the money on the ATM or in the bank as the genuine ten US dollars.Can someone answer me please

John Shava - 6 December 2014

I prophercy these coins will be pushed to the poor and the elite will have black market for US dollars. Kombis, rural buses and poor outlets will trade these coins while the elite places will refuse them. ATMs will not disburse stupid currency. While. ecocash and vegetable vendors will be awash with useless zim dollars. The black market for US dollars will soon flourish. All those with ears or who can read and write remember me after only six months everything will go haywire. Money will never grow in trees. Momey is scarce. Vana hwindi business ramuka.

nhingi - 7 December 2014

I prophercy these coins will be pushed to the poor and the elite will have black market for US dollars. Kombis, rural buses and poor outlets will trade these coins while the elite places will refuse them. ATMs will not disburse stupid currency. While. ecocash and vegetable vendors will be awash with useless zim dollars. The black market for US dollars will soon flourish. All those with ears or who can read and write remember me after only six months everything will go haywire. Money will never grow in trees. Momey is scarce. Vana hwindi business ramuka.

nhingi - 7 December 2014

What is this? There is no way that I will keep my money in a Zim bank. Absolutely no way.

sic - 7 December 2014

They spend 4 days in that bani lambasting Mujuru and not even talking about fixing the economy now they want to steal our moneys through these coins. I will tell you soon banks will be forced by these thieves from dispensing cash to us and instead dispense the coins. e.g if you want 800 they will tell you half of it will be in coins, just watch it. Back to empty shelves and hunger ivo vachiguta because they will get theirs from ours.

maita - 8 December 2014

a good move indeed, but south african coins are plenty in circulation

EDMORE BUTAWU - 9 December 2014

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.