The financial services sector has rejected plans by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya to introduce bond notes “as they are not wanted in the market”.
BY TATIRA ZWINOIRA
Speaking at a Financial Markets Indaba yesterday, Zimbabwe Investment Authority chairman Nigel Chanakira asked the over 200 delegates in attendance to raise their hands in support of the bond notes, and no single hand went up. But when he asked the people to vote against the bond notes, all the delegates raised up their hands.
“If the bond notes are 3% of the monetary circulation, why go through all this trouble? Give us something else besides the bond notes.
“The market does not want them so if the Reserve Bank governor is a listening man, as he has said, please remove the bond notes. The foreign exchange is skewed towards the dollar, why not focus on the Japanese yen, South African rand, or Botswana pula?” Chanakira queried.
He said Mangudya had to listen to the market on whether to introduce the bond notes or not as it was clear that the development was not favoured by both the market and investors.
Mangudya announced the introduction of bond notes in May. He said the notes were expected to start circulating in October as the process takes four to five months.
Sources said Mangudya had found the response to the bond notes worrying and was about to go on a major drive to educate the public on the new currency.
RBZ deputy director of exchange control Farai Masendu, who was one of the two central bank officials present, said the problem was that the US dollar had moved from being a form of exchange to an asset.
“As a result of the dollar becoming an asset, if any new money comes into the market we are bound to lose and see it taken out,” Masendu said.
However, despite the massive spike of the cash back facility and bank withdrawals, RBZ deputy director of bank supervision Ruzayi Chiviri said deposits had “actually been increasing on a weekly basis”.
“I want to indicate that the RBZ must be an agent of government according to the Banking Act. Before the introduction of the bond note facility, discussions had taken place with the Finance ministry,” Chiviri said.