Remembering the past and fearing economic chaos, Zimbabweans are bracing for controversial new bond notes, expected to be released next week in a failing economy.
They’ll have to wait until the notes are actually in circulation to learn details of their features.
The Reserve Bank of Zimbabwe cites security concerns as the reason it won’t disclose details about the bond notes ahead of time, The Chronicle reported.
The bond notes will be considered legal tender, and the government has hinted that they’ll be released in $2 and $5 denominations.
Releasing bond notes is part of an initiative by the Zimbabwean government to increase foreign exchange earnings, improve liquidity, and promote domestic production and exports.
The government is running out of cash, and says bond notes are meant to ease the shortage, but Zimbabweans fear this could trigger rampant printing of cash, which happened in 2008, The Guardian reported. The introduction of the U.S. dollar as the official currency in 2009 stopped the hyperinflation that made Zimbabwean currency worthless.
The central bank has said the introduction of bond notes is not an attempt to re-introduce the Zimbabwean dollar, and has urged the public not to adopt a negative attitude towards the introduction of bond notes, The Chronicle reported. Bond notes will not be forced on consumers, the government has said.
But Zimbabwean authorities have arrested dozens of opposition activists before the launch of the bond notes, The Guardian reported. Many ordinary people fear the bond notes will wipe out savings and livelihoods.
The bond notes are being introduced under a $200 million deal guaranteed by the Africa Export Import Bank (Afrexim-Bank). Reserve bank governor John Mangudya hinted that bond notes worth $75 million will be released by the end of December in $2 and $5 denominations.
“We will only advertise the features of the bond notes simultaneously with their release and this is for security reasons,” said John Mangudya, reserve bank governor, Zimbabwe Daily reported.
Bond notes will be a disaster, said Tendai Biti, an opposition politician. “We are already in a disastrous situation. We are in a deep recession. If you add bond notes there will be the return of the black market, hyperinflation. It will be a dog’s breakfast.”
Readers commenting on The Chronicle news website showed that for Zimbabweans, cash isn’t the only thing running low. There’s a shortage of trust:
“(In the past) features of any notes or coins were released and
the public schooled on them before the notes or coins were released. What has
changed now? There is serious dent in the confidence level of the new bond notes … fake notes being printed is still fresh in the
minds of the people…come clean and help build the people’s confidence on this issue.”
“How can the public have confidence in u. If (you) reveal the security features as you release the bond note, and the
fake notes are also released how will we tell the difference?”
“How will the public know if they’ve been given a genuine bond when they don’t even know what it looks like or it’s features. In the past RBZ has advertised new currency.”
“Since (when) do security features of a currency become a secret??”
“This shows the so-called bond notes have no security features to talk of hence fear of disclosing the weaknesses. Where have you ever heard notes being released to the public without the public being informed of the security features? To hell with bond notes!”
“You make us doubt it before its even out. What I know is that if there is new money comnig in people by now should be having some basic
awareness of the features and the media will be helping people to know the features. So you mean there wont be any basic education on this….I smell a rat here.”
“The country is one step closer to going (bankrupt).”
Political violence has increased dramatically in Zimbabwe, The Guardian reported. As of Oct. 21, 2016, about 654 cases of abduction, torture and assaults were recorded by local NGO the Counselling Services Unit, compared with 476 cases in all of 2015. The assaults were overwhelmingly perpetrated by the state’s security forces – police, military and the secret intelligence, CSU found.
Those arrested include Patson Dzamara, a prominent opponent of President Robert Mugabe and the ruling Zanu-PF party. He was found at a local hospital a day after his arrest, badly beaten. He was part of a coalition of opposition groups promising to shut down major cities on Friday to protest corruption, human rights violations and bond notes.
His brother, Itai, has been missing since being abducted in March 2015.
Waves of unrest in recent months have been prompted by the deepening economic crisis, cash shortages and unemployment. The government has been late paying salaries to teachers, doctors, soldiers and administrators. The drought is making it worse.
Pressure on Mugabe is extreme. Officials have have blamed foreign powers for sabotaging the economy and stoking unrest, accusing western embassies in Harare and opposition parties of trying to cause chaos.
Zimbabwean banks are limiting daily withdrawals to between $40 and $100, the Guardian reported.
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