Harare - Zimbabwe is so short of US dollars - which it has used since it abandoned its own currency six years ago - that it is to introduce a new form of cash, called “bond notes”, in the next two months.
This shock announcement was released late on Wednesday by the Reserve Bank of Zimbabwe.
Read: Zimbabwe compels rand use amid cash crisis
The bond notes, central bank governor John Mangudya said, would ease the cash shortage and would be in denominations equivalent to $5, $10 and $20.
But he did not say where the new notes will be printed.
Zimbabwe can print banknotes but said the value of the bond notes would be backed by a $200 million (R2.9 billion) loan or “facility” from the Africa Export Import Bank already in use for bond coins, which are minted in South Africa and are used as change in retail shops.
The latest crisis arose, analysts say, because Zimbabwe’s exports are dwarfed by imports of even basic goods sold in supermarkets, ever since the farm invasions from 2000 crashed the economy, which is heavily dependent on commercial agriculture.
With the gross devaluation of the Zimbabwe dollar, world record-beating hyper-inflation spiked, leaving Zimbabweans with empty supermarkets, closed schools and hospitals, and a frozen economy.
Mangudya also announced that with effect from yesterday, 40 percent of all new US dollar receipts will be converted to rand, “to promote the usage of currencies in the multi-currency basket”. He has not revealed whether it took the new dramatic steps for its cash crunch after consultation with South Africa’s Reserve Bank.
FOREIGN SERVICE
THE STAR