Zimbabwe to Introduce Bond Notes to Help Ease Currency Crunchby
Zimbabwe will release dollar-backed bond notes with a daily withdrawal limit of $50 on Nov. 28, the central bank said, as the Southern African nation grapples with a shortage of currency.
“The bond notes will be released into the market through normal banking channels in small denominations of $2 and $5 to fund export incentives of 5 percent which will be paid out to exporters of goods and services and diaspora remittances," the Reserve Bank of Zimbabwe said in an e-mailed statement on Saturday.
“The use of bond notes within the multicurrency exchange system which are anchored to the $200 million facility will operate along the same lines as bond coins," the bank said. Zimbabwe is facing currency shortages which has seen banks limiting withdrawals to $40-$50 a day from $300.
The country abandoned its own currency in 2009 to end hyperinflation and uses mainly dollars, with rands, euros, pounds and several other currencies also accepted as legal tender. A shortage of foreign exchange after a collapse in exports has caused a liquidity crisis that’s forced the government to delay worker payments. On Nov. 7, President Robert Mugabe authorized the introduction of dollar-backed bond notes.