HARARE- In a further confidence sapping move by trapped authorities, RBZ has released a specimen of the “new Zimdollar notes” which in essence is not new at all as it is a complete replica of the bond note, a pseudo turned official currency introduced in the fall of 2016.
— Equity Live (@EquityLive) October 30, 2019
Last week the Central Bank announced that it will release the physical forms of the new Zimdollar currency introduced earlier in June. The bank said the release was necessitated by acute cash shortages prevalent in the economy.
Citizens have had no access to cash via the conventional means for 3 years and the scarce notes available, being the bond notes, could only be accessed through mobile money merchants at a steep premium of up to 60% on electronic money.
Despite a momentary frenzy at the point of announcement, citizens have begun to question the rationale behind limiting the new notes to just $2 and $5 dollar notes given the sharp spike in prices of commodities in the market.
A packet of 2kg sugar which previously cost $2.2 in US dollars, now cost ZW$40 and this would take some 8 times ZW$5 leafs where it previous required only a single US$2 leaf. To minimise the costs of seignorage and overall printing of new small denomination notes, it would follow basic sense for RBZ to introduce high value notes of up to ZW$2 notes.
The governor of the Reserve Bank initially skirted when asked about the rationale, saying it was a matter of reading the market’s reaction while it gradually adjusts to higher notes and higher volumes of cash injections.
In an interview with Star FM on Tuesday, a member of the recently setup Monetary Policy Committee member, Eddie Cross, however said the reason for the issuance of smaller denomination was because government could not afford high end security features and therefore wanted to minimise the impact of counterfeit money on higher denomination.
The confession may possibly imply that the already circulating bond notes now at a balance of $750 million do not have adequate security features. Be it as it may, the purported new currency will come in as not so new as it is designed completely the same with the existing bond notes.
The most logical deduction would be that RBZ simply converted its ready stock of bond notes yet to be released and omitted only the term bond note, before posturing the “new currency”.
This is a further dampener of confidence in the issuing authority. The currency is expected on the streets later this week.
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