Cash shortage in Zimbabwe has inspired the government to print its own version of US dollars. The country had introduced the US dollars back in 2009 when it ditched it’s own currency after sustained hyperinflation.
The Central Bank governor, John Mangudya said the new version of US dollars known commonly as bond notes will be backed by a $200 million support from the Africa Export-Import Bank. They will be specially designed two, five, ten and twenty dollar notes that will have the same value as their US dollar equivalents.
Although Zimbabwe does not singularly use the dollar for trade, with the South African rand and the Chinese yuan as viable options, most Zimbabweans still prefer using dollars because they are reluctant to hold the others as they are not confident about their ability to maintain value against the US dollar. Shoppers in Zimbabwe are also not always able to use the wide official range of currencies for all purchases and bank customers are not always able to withdraw the amount of US dollars they want because of a shortage of dollar notes in Zimbabwe.
The Central governor who stressed to the Zimbabwe Herald newspaper that the issue of bond notes was a first step in reintroducing the defunct currency has likewise introduced a number of other measures to steer people away from using US dollar cash which included setting a $1,000 limit on how much cash can be taken out of the country. His intention is to encourage people to make greater use of the rand since a large portion of Zimbabwe’s trade is with South Africa.
In 2014, the Central bank had brought in so-called bond coins of one, five, 10 and 25 cents, pegged to the US dollar but apparently that did not work out as imagined. Mr. Mangudya although stating that the Central bank was still working on a design for the new notes revealed that they should be in circulation “within the next two months”, according to the Herald.