RBZ To Introduce Bond Notes, Sets Withdrawal Limits

By Dylan Murambgi

Harare, May 04, 2016 – THE Reserve Bank of Zimbabwe (RBZ) will soon introduce bond notes with the highest denomination being a $20 as part of a raft of measures to ease the liquidity crisis in the country.

Addressing a press conference in Harare Wednesday, RBZ Governor, John Mangudya further set minimum daily withdrawals at $1000 or $1000 euro or ZAR 20 000.

The bond notes set to be introduced will support the USD 200 million foreign exchange and export facility which the central bank established to try and cushion the high demand for cash and to provide an incentive facility of 5 per cent on all foreign exchange receipts on tobacco and gold sale receipts.

Mangudya said as a way of promoting the widespread usage of other currencies in the multi-currency basket , the central bank would effective Thursday, May 5, convert 40 per cent  all new USD foreign exchange receipts from export of goods and services to rands and 10 per cent to Euros.

He was quick to point out that the introduction of the bond notes was not in any way the re-introduction of the Zimbabwe Dollar, dumped in 2008 after it had lost value.

“The Zimbabwe Bond Notes of denominations of $2, $5, $10 and $20 shall, therefore, be introduced in future as an extension of the currency family of bond coins for ease of portability in view of the $USD 200 million backed  facility,” he said.

Mangudya said the central bank hoped to stabilise the economy by increasing the availability of other currencies within the currency basket, noting that there had been over reliance on the USD, which put a strain on local banks.

“However, the currency utilisation levels under the multi-currency system have been skewed towards the USD.

“In order to resolve the cash shortages in the economy, whilst at the same time stabilising the economy, it is essential to go back to basics of restoring the fundamental principles of the multi-currency system through increasing the availability of other currencies within the multi-currency basket,” he said.

The central bank chief said the lender of last resort had also come up with a foreign exchange priority list that would guide banks in the distribution of foreign currency.

Net exporters who imported raw materials, non-exporting importers of raw materials, imports of strategic goods such as food and health care products, agro-chemicals and, repayments of offshore lines of credit and payments for services not available in Zimbabwe among others were placed in the high priority level.

Mangudya said this would ensure the available foreign currency was efficiently distributed to sectors which had the capacity to boost the country’s economy. 

“This will help reduce the country’s import bill and at the same time enhancing production across all sectors of the economy,” he said.

The central bank has also directed that all service providers, including wholesalers and retailers install Point of Sale (POS) so as to reduce demand for cash.

“Accordingly, all retailers, wholesalers, businesses, local authorities, utilities, schools, universities, colleges, service stations, informal sector among others, are, with immediate effect, required to install and make use of the requisite POS machines so as to reduce the demand for cash in the economy,” he said.

He said banks should ensure requisite infrastructure was put in place across the country, adding that the 17 000 POS machines currently in the country were mainly concentrated in urban areas.


“Payment systems providers, participating banks and key stakeholders are further urged to continue to enhance the efficiency and interoperability of systems. This will go a long way in enhancing convenience, usage and stability to the transacting public,” he said.