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Zimbabwe on Monday starts issuing “bond notes”, its own currency equivalent to the US dollar in a bid to ease critical cash shortages amid widespread fears of a return to hyperinflation.
The crisis-hit southern African country has used multiple foreign currencies, including the greenback since 2009 after a rate of inflation that peaked at 500 billion percent rendered the Zimbabwe dollar unusable.
The introduction of $2 and $5 bond notes into circulation follows the issuing of bond coins over a year ago to ease shortages of change in smaller denominations.
The country has experienced a severe shortage of US dollar banknotes in recent months which forced President Robert Mugabe’s government to print what locals have dubbed “surrogate money”.
“Citizens are generally opposed to the introduction of bond notes because they are still smarting from the death of the Zimbabwe dollar, which was abandoned in 2009 due to hyperinflation,” said an editorial in the weekly independent newspaper The Standard.
According to the Reserve Bank of Zimbabwe (RBZ), the bond notes will be officially interchangeable 1:1 with the U.S. dollar and should ease the cash crunch.
The government said the new notes will be backed by a $200 million support facility provided by the Cairo-based Afreximbank (Africa Export-Import Bank).
The crisis-hit southern African country has used multiple foreign currencies, including the greenback since 2009 after a rate of inflation that peaked at 500 billion percent rendered the Zimbabwe dollar unusable.
The introduction of $2 and $5 bond notes into circulation follows the issuing of bond coins over a year ago to ease shortages of change in smaller denominations.
The country has experienced a severe shortage of US dollar banknotes in recent months which forced President Robert Mugabe’s government to print what locals have dubbed “surrogate money”.
“Citizens are generally opposed to the introduction of bond notes because they are still smarting from the death of the Zimbabwe dollar, which was abandoned in 2009 due to hyperinflation,” said an editorial in the weekly independent newspaper The Standard.
According to the Reserve Bank of Zimbabwe (RBZ), the bond notes will be officially interchangeable 1:1 with the U.S. dollar and should ease the cash crunch.
The government said the new notes will be backed by a $200 million support facility provided by the Cairo-based Afreximbank (Africa Export-Import Bank).
