No Zim-dollar return — Mangudya

HARARE - Reserve Bank of Zimbabwe (RBZ) governor John Mangudya yesterday dismissed rumours about the return of the discredited Zimbabwe dollar (ZW$) following vicious rumours that were making the rounds in the market.

Early this month, Mangudya announced the RBZ was set to print bond notes under a $200 million Afrexim Bank-backed bond in the form of a five percent bonus to exporters, but the development was interpreted by some quarters as an attempt to sneak the local currency through the back door.

“The RBZ would like to assure the public that such rumours are unfounded. The multi-currency is here to stay. The rumours should be dismissed with the contempt that they deserve,” Mangudya said in a statement released last night.

He said the payment of the five percent bonus to exporters was necessary to sustain and safeguard the multi-currency system in Zimbabwe, with export vouchers expected to be disbursed in October 2016.

Zimbabwe — which abandoned its currency in 2009 and adopted nine currencies as legal tender in a multi-currency economy — still has fresh memories of the 2008 hyper-inflationary era were everyone in the country was a billionaire using the country’s worthless ZW$.

The proposed bond notes, to be printed in Germany, are set to make up a tiny fraction of the over $6 billion cash in circulation.

“There is nothing like the return of the Zimbabwe dollar as the country shall continue to use the multi-currency system. We have assured the public before and we would like to continue to do so that the country’s economic fundamentals do not support the return to the ZW$,” the central bank chief said.

According to Mangudya, the purpose of bond notes is to deal with an incentive for exporters, who are the primary cash providers in the economy.

“The public should not confuse the export incentive or bonus scheme to be paid to exporters in the form of export vouchers called bond notes to assist exporters to generate more foreign exchange as a return to the local currency,” he said.

The bond note incentive set the nation into a panic frenzy with depositors rushing to withdraw their hard-earned monies from financial institutions — sparking fears of bank run-ins.

“The unnecessary large withdrawals witnessed over the past two days are therefore unwarranted.

“The market should remain calm and conduct business in the normal manner. RBZ has imported sufficient US$ cash to meet normal requirements for the banking public. Unnecessary withdrawals are therefore counterproductive to the bank’s cash importation programme,” the central banker said.

Mangudya also pleaded with businesses, urging them to bank their cash takings in line with the Bank Use Promotion Act to avoid incidences of money laundering and haemorrhaging the multi-currency system.

Long winding queues have been the order of the day as most depositors rush to get their hands on the little money left in the formal banking channels. Some banks have also stopped disbursements, a situation that has worsened public sentiment around the proposed bond notes.

So dire is the situation that local banks have been pleading with clients who handle cash to bank their monies, as retailers and wholesalers are skirting these financial institutions  as corporates now have a $1 000 withdrawal limit per day.

This comes as the Confederation of Zimbabwe Industries (CZI) recently said Zimbabweans must embrace the proposed bond notes, saying they will boost internal trade and ease the cash crunch threatening Zimbabwe’s already lethargic economy.

Comments (16)

@viola gwena and@ truth,yo RBZ governor says bond notes will only be released against exports as it is to incentivise exports,they say were there are no exports no bondnotes,does this mean that my home town of plumtree which has no exporters the banks will have no bond notes as there are no exporters there?kindly give clarity

jojo - 29 May 2016

Mangudya should know that Trust is priceless. No matter how much he may explain Zimbabweans have no trust in him and Chinamasa and therefore nobody is listening to your false plea. There is a run on the Banks following the careless announcement of the introduction of the bond notes. I have $20000 in my Bank Account and to avoid my money being converted into bond notes I will go to the Bank every Banking day to withdraw $200 for the next 100 days. Whatever new money I get I will keep it under my pillow just to make sure my USD is not John Bonded. I might change my mind if the Bond Notes are given a seal of approval by the International Monetary Fund (IMF). I do not trust this govt and Afrexibank and do not believe the Bond Note idea is sound. In my view the real problem is the unfinanciable total govt expenditures. More than 90% of total expenditures is Civil Service wage bill and yet govt is doing nothing about it. They now want to print the USD via Bond Notes and takes us back to the hyperinflation days of 2008. Once beaten twice shy! No..No.. No to bond notes#

Collins - 29 May 2016

@panonetsa; i think the pple has spoken and, for once, please abandon this bondageon pple's money i beg. roping in walter to try and convince the plc will not work. yu will end up being tricked like that other lot which thronged chinhoyi for some 'diesel'. respect the voice of the pple and tell rhobhati that povho yaramba. wedzayi zvimwe warumhe!

SaManyika Chaiye - 29 May 2016

Those in the President's Office are busy flying the nonagenarian all over the world in a bid to prevent him from seeing the chaos that is ensuing at the banks. As usual, he will come back, ignorant and wonder why the economy is comatose. Mugabe is out of touch with reality and this should be the main reason why we vote him and Zanu Pf out in 2018. Forget sanctions, corruption or land underutilisation. The government is to blame! No wonder why we are in support of #ThisFlag.

John Bond - 30 May 2016

The good governor went too early. Zimbos still have vivid memories of 2005-9 when bearer cheques raked havoc. Rich people became poor. poor people became poorer and destitute. Those who burnt money got burnt themselves. In 2015 a couple of $s were dished out as compensation for lost forex. This is still vivid in our minds. This pronouncement sir governor brought fear and dispondence in the banking public. But Why? Maybe you could have waited till our industries were up and about. Wait till productivity had been restored and we were exporting goods manufactured us. Mazviita

ngirozi mikairi - 30 May 2016

Mangudya should know better as he is said to be a doctorate holder. The bond note are similar and worse off than the regime of bear cheques which were presided by Gideon Gono. The bearer cheques did not have a lie of them being backed and equivalent to USD. People knew that they would be affected by the fluctuations of currencies in the world. The so called bond notes are said to be backed by USD dollar which we all know is none existing USD, thus lie number one. Then the second lie is that it equivalent to USD. Why giving people the equivalent instead give them the real dollar which every one is familiar and accepts. Gideon Gono said failure was not an option but sadly he failed dismally. Under Smith and then RRB (Rhodesia Reserve Bank) now RBZ, Zimbabwe inflation was at 7% in 1980 and it started going up to 10% by 1987 and went down to 7.3% in 1988. Then it started going up as Mugabe's influence on all facets of the country grew. When he finally had the total control and appointed stupid and ignoramuses governor, Gideon Gono it top 231 150 888.87 %. Thus a combination of MUGABE's Regime and Gono's Advise to the government on monetary affairs. Mangudya if going again the same route. This is the TIME TO RESIGN MANGUDYA or you became the same disheartened Gideon Gono. He rose through the ranks from a tea boy and he has made every citizen now a tea boy in the entire in and world over due to poor economic policies.

amina - 30 May 2016

@jojo,the RBZ has fully functioning public relations dept which could greatly assist yu with you qeuery,email them ,if yu not satisfied i can get yu mangudyas email or khuphukile mlambo email

truth - 30 May 2016

ko yatiri kuhwa mr editor kuti mupwere wavachinamasa akabatwa zuro paboarder (beitbridge) une USD7 million in his car trunk going to RSA, is it true? can u please investigate and tell us as it is?

adzoo - 30 May 2016

My question is, will the civil servants be paid in Bond notes or USD, or both? Once the civil servise is paid on Bond Notes then the economy is back to 2007

Shaik Gupta Wicknell Yussuf - 30 May 2016

Bearer cheques were introduced as Agro cheques to support farmers before developing into full blown bearer cheques.Chakatanga ndicho chakachenjedza.

TONDORI - 30 May 2016

it was actually a trial & error until they settled for the special agro checks. the started with travellers' checks which were meant for kross boarders, then came the agro checks for the farmers, noe they want to play the trick with exporters. inharadada wanhu awa!

SaManyika Chaiye - 30 May 2016

get rid of him with a gun

r hamond - 30 May 2016

Yes!! we welcome the junior BOND NOTE, off-spring to senior BEARER CHEQUE........!!

Mukanya - 31 May 2016

We took lessons from the past. "A leopard will never change it's spots". Once beaten twice shy... Beitbridge

Vusi Mavusane Chinas - 31 May 2016

Trying to figure out what the plan is for the country to ultimately have its own currency? Nine currencies and we own none of them. Good Heavens!!! WHAT IS THE PLAN?

J - 31 May 2016

I am sorry vaMangudya I will never trust the Reserve Bank governors' under a ZANU PF government. In January 2008 as a civil servant I was given $100,00 for all my expenses. My salary for December was $21819856.56 allowances were $38309275.60 giving me a net salary $36294305.46 which could not pay for anything because nobody was accepting bearer cheques. For the next six months all my net salary was banked at Standard but this amount could not be withdrawn. I have no idea as to how much my six months salary was converted to. Form then on I had to kiya kiya. My landline bill was converted to US$2000,00 by Net One whereas before I paid on time in Z$. That was a rip off. My hundred dollars thanks to Biti who declared that vouchers took away peoples' freedom to buy in store of their own choice. Do you really believe that your protestations would convince me to go bond? No way comrade.

Mavara Azarevhu - 31 May 2016

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