The RBZ has said that they are adding another $300 million worth of bond notes (I call them notes of bondage) by the end of November. They say this is again supported by another facility from the African Export and Import Bank (Afreximbank).
Perhaps Ignatius Chombo, the new minister of finance (it still surprises me) has seen how huge a success the notes of bondage have been. To those who may catch on slow, I was just being sarcastic: bond notes have not succeeded.
Have they failed though?
I don’t know if they have failed. They held their own. For some weeks following their introduction they kind of maintained a 1:1 parity with the USD. As predicted though they started falling in value against the USD. This led to the government outlawing the exchange of currencies on the streets or any other place except designated places where it is claimed you can exchange the notes of bondage at 1:1 with the USD.
However, the bond note is valued higher than money in your bank account. This is a bit confusing, why is it like that? This is because when all of us expected the government to print more of the bond notes (unbacked by any Afreximbank money) thus devaluing the notes. The government may not have done this (we can’t be sure they didn’t). They duped us and did worse: they printed numbers into our bank accounts.
The government just invented bank balances and overnight our hard earned money within the banking system was left worthless. The bond notes might have succeeded in hoodwinking us as the real printing of money was happening. Success is always measured against the original intention. Maybe we thought the intention was for the cash crisis to be brought under control while the government knew all along that this was just to steal our hard currency which they did.
Bond notes are still an export incentive
The RBZ still insists that the bond notes including the more that are on the way are an export incentive. I don’t know what that really means hey, I never did. Maybe the clever community here on Techzim can help me understand how the notes of bondage are an export incentive
Bond notes might have succeeded
Maybe it was fake news but I heard that RBZ governor, John Mangudya declared that he would resign if bond notes failed. The man is still in office so it therefore means the notes did not fail. They may not have succeeded but surely if they had failed VaMangudya would have resigned. Instead he is printing more…
8 comments
This was all planned when the collision Govtn was dissolved…… bring back the Zim $ so hyperinflation can hit the streets again. The poor can starve and the few can make millions trading on the black market. It is like we don’t want to be the bread basket of africa anymore, but a corrupt country who has let down 99% of its population.
Which Zwd??
We are using zwd now.
Bond notes are Zim $. They cannot and never have the same value as the USD. Crazy thinking.
If Afreximbank want to support the government why don’t they just put $300 million US dollar notes into the economy? (We all know the answer to that one)
” Maybe we thought the intention was for the cash crisis to be brought under control while the government knew all along that this was just to steal our hard currency which they did.” – It was never just a simple cash crisis , it was and still is a full blown financial crisis. By enforcing withdrawal limits and at times simply refusing to give depositors cash government is able to buy time and “postpone” the total collapse of the financial system. The ” printing of numbers into bank accounts” has been going on for a long time and is what caused this mess.
How will we turn this around? This is a very unique financial problem we have got ourselves into.
Well looks like 2008 is officially back…. Not that we did not know but hey what can we do about it… With the printing the unofficial exchange rate is obviously going up… But again what can we do about it… Im already losing 40% on bond notes…. Then I’ll lose another 85%on bit coin and if I put it on properties im going to lose another 50%… There no end in sight and this problem is taking up to much of my nights and work time… Only solution is leave…. What else can I do
If you want US$100 on the parallel market, you have to pay $200 in bond notes or transfer $250 if it is intra or inter-bank transfer. I believe that represents the correct exchange rate at the moment. The more notes they inject into the system, the more the loss in value. Why are the authorities insisting that we write US dollars on the withdrawal slips when they are giving us paper? Obviously it is to cover their backs because some clever dude might turn back and demand their hard currency. But with a signed withdrawal slip acknowledging receipt of US dollars there is no chance in hell of denying one was not given US dollars, technically that is.
How far true are those rates of US$100 equal to $200 bonds/$250 bank transfer .Are they the o es that are really prevailing on the market in Harare.Am in Byo