Zimbabwe recently launched the long-awaited bond notes. The bond notes are bright green-coloured and expected to be accepted by all businesses and individuals.
The bond notes were introduced as a result of a shortage of the dollar. The bond note trades at a ratio of 1:1 against the dollar in the black market, so fears of depreciation of the “currency” are not valid at the moment.
“For now it is the same rate whether it’s bond or U.S. dollar, my brother. We will see in the next few days whether it changes,” Tatenda, a currency tout who declined to give his surname said to Reuters.
All businesses are expected to accept the bond notes as a method of payment, however, a viral video showed a retailer from a Pick n Pay store refusing to accept the bond note.
Various uncertainties preceded the release of the bond notes. The Reserve Bank of Zimbabwe (RBZ) were secretive about the release of the bond notes as well as the place of production, prompting many in Zimbabwe to be wary of the new “currency” and also causing fears that it could result in a hyperinflation recurrence.
The hyperinflation which took Zimbabwe by storm in 2009 rendered the Zimbabwean dollars unusable. Since then, the southern African country has used multiple currencies including the South African rand, US dollars, among others.
Zimbabwe, once described as the bread basket of Africa, is no longer living up to its title. The drought-plagued country has led to increased hunger in many homes.
Although the southern African country repaid its debt to the IMF, it still owes the World Bank and African Development Bank an outstanding debt of $1.6 billion.
As a result, Zimbabwe can not secure loans from international financial institutions. Even the IMF stated that it must repay its loans owed to other financial institutions before securing one with the IMF.