The Reserve Bank of Zimbabwe (RBZ) claims it is aware that bond notes are now being sold in Mozambique, Zambia and South Africa and this has contributed to the unyielding cash crisis in the country, a tacit admission of failure, as the central bank always claimed the surrogate currency will only trade hands within Zimbabwe’s borders.
BY TATIRA ZWINOIRA
RBZ deputy governor, Kupukile Mlambo told participants at an international retailers’ indaba hosted by Confederation of Zimbabwe Retailers (CZR) in Harare yesterday that the central bank was surprised to learn from its staffers and bankers that bond notes were being found across the border.
“I am told that bond notes are now used, or you can now find them in Mozambique on the border with Mutare, Victoria Falls on the Zambian side in Livingstone and at Park Station in South Africa. I am not sure, because when we introduced them, they were not able to be externalised,” he said.
“But I suspect that people know that if you are holding a bond note when you come in and buy from a retailer at a one to one rate with the United States dollar, it is good for them to hold those bond notes. We have to establish the amounts that are outside. My guess is that they are not as much as people say they are.
Mlambo’s statements come as cash shortages continue to bite, with the bond note increasingly scarce.
“I have heard bankers say there are a lot of bond notes outside, but we have got to establish how much they are,” he said.
“In general, getting bond notes to South Africa is not illegal because I am allowed to carry $1 000 in cash. Unless the amounts are big, the Zimra guys will not stop you from carrying, so you are allowed to carry that.”
Mlambo said incentives needed to be put in place to ensure that bond notes return to the local market.
This comes as the central bank confirmed a reduction of bond notes in the market, despite having put $140 million worth of the pseudo currency into the market.
The central bank said, on average, a review on the current liquidity balances of banks, showed that between 2% and 3% of bond notes and coins were in financial institutions’ vaults.
Mlambo suggested cross border traders were responsible for taking bond notes across the border, which he bizarrely said were a more “stable” currency compared to the South African rand.
Cross border traders are estimated to be spending $1,15 million daily buying their wares.
Financial expert, Persistence Gwanyanya, said bond notes were being found across borders due to their parity with the United States dollar.
“So, one finds it better to hold a bond note than a rand, for example, because when you hold a bond note to an extent you preserve value. Some institutions use the bond notes to buy locally at an equivalent to the United States dollar, so in a way you have actually preserved value,” he said.
“But, obviously there needs to be deeper research into that issue because it appears to me to not make sense from an economic point of view, as the currency is valueless outside the border and Zimbabweans do not have excess cash.”