The Reserve Bank of Zimbabwe is said to be bringing back the loathed Zimbabwe dollar through the back door by introducing bond notes as the RBZ prints a new $5 bond note.

Former Finance Minister Tendai Biti says the word bond denotes a loan or a legal instrument issued by the Finance minister in terms of the Public Finance Management Act. But just like bond coins, bond notes are being issued by the Reserve Bank of Zimbabwe (RBZ) as legal tender signed in (accordance with) the RBZ Act, meaning to say bond notes will be money and not a prescribed instrument. So the bond paper will also be a currency. It will also be used as legal tender. It will be used interchangeably with the US dollar and for that reason, there should be no doubting in anyone’s mind that the central bank is trying to reintroduce the Zimdollar.

This came as the central bank announced it is printing a new $5 bond note denomination.

The currency notation will be in full circulation by March this year.

RBZ Governor Dr John Mangudya made the announcement through the state media.

The $1 bond coins and $2 bond notes were introduced in November last year as an export incentive and to ease cash shortages triggered by flight of the US dollar. US$72, 9 million of bond notes are now on the market after the RBZ paid the export incentive to exporters of goods and services, including diaspora remittances.

Mangudya told the state media that the $5 notes will be released in March in a gradual manner with monetary authorities wary of not over-flooding the market with the currency.

“The $5 notes will be unveiled when it comes at the appropriate time, normally those are issues of security, but they will be on the market during the first quarter around March.

“We are not going to flood the market but we want to make sure that bond notes continue to be a reliable medium of exchange.”

He encouraged employers to manage their employees so that they do not queue for cash hours on end instead of engaging in productive work. “Employers need to manage their employees better. What time will they be working if they spend the whole day at the bank?’ he asked.

“If you check we normally have problems when people get paid. Instead of working they will be at the bank.”

Mangudya encouraged members of the public to withdraw cash on a gradual basis, saying their money is safe within the banking system. He said panic withdrawals put unnecessary pressure on banks.

“Our banking sector is sound, there is no need to panic and put unnecessary pressure on the banks. We must give our banks some space.

“We are encouraging people to use plastic money and mobile banking. This is very critical because it reduces pressure on the hard cash. The purpose of money is to transact and by using your card or electronic banking system, it achieves the same purpose. “As we speak we have invested a significant amount of money in improving our infrastructure. We have released more than 30 000 Point of Sale machines, which is significant from the 9 000 we had by mid last year.”

He said plastic money transactions at established retailers have gone up to between 60 to 70 percent.

Dr Mangudya said the RBZ is aware of some retailers who are painting a bad picture on the country’s POS infrastructure.

“Our electronic banking infrastructure is intact but just like any other electronic gadget, sometimes the system breaks down. It’s not more about the card but service providers might have problems, it’s normal just like any other system.

“Perfection is very difficult to attain but when the system is working 90 to 95 percent, I think it will be very good.”

“The banks are working very hard to improve, this is work in progress.”

Dr Mangudya said the RBZ is working with other Government departments to promote the usage of plastic money and mobile banking.

Since early last year, Zimbabwe has been facing critical shortages of the US dollar owing to a number of factors that include high imports versus low imports, low foreign direct investment and the fact that the country is being used as a fishing pond for the green back.