Struggling with a shortage of cash Zimbabwe has introduced a new currency, a “bond note”, redeemable against US dollars, which has been the country’s official currency since 2009.
However, many people fear the bond note will wipe out savings and trigger printing of money, which raged out of control in 2008, leading to the adoption of the dollar.
The secrecy of the Reserve Bank of Zimbabwe (RBZ) around the release of the notes, including its failure to publish security features or say where they are being printed, has heightened fears it will print more than a stated $200 million issuance limit.
The RBZ first announced plans to introduce the bond notes in May to address the chronic cash shortages and supplement the dwindling U.S. dollars that have been in circulation for the past seven years.
However, the announcement was followed by a run on the banks as Zimbabweans tried to empty their accounts of hard currency deposits.
“People are sceptical because of what happened to our old currency [Zim dollar] in the past when the money lost its value. That is why they think it could happen again,” said 36-year-old street hawker Tennison Tigere, after withdrawing $50 of bond notes.
“This money should be accepted by everyone because it’s from the government. Whoever refuses it is clearly anti-government and should be reported to the police,” said one Harare resident.
“We don’t need the bond note, this is daylight robbery to steal from Zimbabweans. What happened to the Zim dollar is exactly what will happen to these bond notes.They have already stolen the real money,” said a more sceptical member of the public.
The bond note introduction has sparked unrest in recent months, also fuelled by the government paying many salaries late, a drought, high unemployment and serious food shortages.
From 1 January the Chinese yuan will also be legal tender in Zimbabwe.