THE introduction of bond notes has not eased the deep-seated cash shortages bedevilling the country as meandering queues of depositors in need of cash continued outside banking halls a fortnight after the central bank launched the unpopular currency.
By Fidelity Mhlanga
There is growing demand for cash as desperate depositors are sleeping in queues in Harare’s central business district with some banks failing to give clients some money.
The surrogate currency did nothing to change the cash situation as withdrawal limits in some banks have even gone down to US$50 from US$100.
Already, there has been confusion over export incentive payments to beneficiaries, with tobacco farmers still awaiting payment.
The bond notes have now become a pseudo legal tender.
Lack of transparency by the central bank was evidenced by ambushing the market with US$1 bond coins.
Zimbabwe National Chamber of Commerce chief executive Chris Mugaga said while the chamber was backing the bond notes initiative, it was not a means to end the cash shortages bedevilling the country.
“As a chamber we are behind the governor’s imitative to solve the cash crisis, but we know bond notes may not necessarily ease the cash crisis due to the macro-economic challenges affecting the economy. If we are not careful, we will end up funding liquidity instead of paying exporters,” Mugaga said.
This comes after Reserve Bank of Zimbabwe (RBZ) said it would drip-feed bond notes into circulation to circumvent high inflation, putting a year-end cap of US$75 million.
He said the volumes of transactions on point-of-sale (POS) may increase by 25% due to the festive season and yet POS is not spread across the country.
“It’s going to be a long walk to Christmas which might be littered with pressures to withdraw money. Our fear is that the central bank might be forced to increase to dispense more bond notes and hit US$100 million by December up from the intended US$75 million because of liquidity preference. The only advantage we have now is that few companies are paying bonus,” he said.
Confederation of Zimbabwe Industries president Busisa Moyo said there has been an improvement, but bond notes are not sufficient as the country heads toward the festive season.
“There is an improvement, but they are not sufficient. We need more liquidity especially during the festive season.
From the transacting perspective, the impact has been positive but the supply is not sufficient,” he said. “We have been notified that manufacturing companies’ accounts have been credited with the incentive, but they are still finalising.”
Consumer Council of Zimbabwe executive director Rosemary Siyachitema said although it was early days, bond notes were transacting very well.
“Bond notes are being used. People are transacting with them. We were in Gweru, Gwanda and Hwange the public is buying and selling in bond notes,” Siyachitema said
As we were moving with the RBZ people, the bond notes are exchanging quite well. We haven’t heard any problems. It’s early days, though, so we have to keep monitoring.”
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