Mnangagwa formalises bond note use as currency

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By Kingston Ndabatei

PRESIDENT Emmerson Mnangagwa has effectively legalised the back-door re-introduction of the Zimbabwe dollar through gazetting the bond note for use as a stand alone currency.

In a Statutory Instrument published Friday, Mnangagwa passed regulations amending the Exchange Control Regulations of 1996.

The regulations were passed a day after central bank governor John Mangudya announced a new monetary regime that elevated the bond note into becoming part of a basket of currencies to be traded through the local inter-bank system.

“The Exchange Control Regulations 1996 published in Statutory Instrument 109 of 1996 is amended in section 2 (interpretation) by insertion of the following definition of ‘currency’: (a) means the coin and paper money of Zimbabwe or of a foreign country that is designated as legal tender and which is customarily used and accepted as a medium of exchange in the country of issue.

“…for the purposes of these regulations bond notes and coins as defined in Section 44 of the Reserve Bank of Zimbabwe Act (Chapter 22:15) (No 5 of 1999),” the Statutory Instrument reads in part.

“…any electronic currency issued in terms of section 44C of the Reserve Bank of Zimbabwe Act (Chapter 22:15) (including in particular the RTGS dollar).

“…any bill of exchange, promissory note, travellers cheque or letter of credit or any draft or other document issued to obtain currency or credit for an amount of money.”

Mangudya’s new monetary regime also reintroduces the bureau de change system that collapsed almost a decade ago when Zimbabwe’s dollar was rendered useless by record hyperinflation in what later forced the country to adopt the United States dollar as its anchor currency.

Mangudya however argues he has not introduced a currency but has created a system that seeks to cut out a thriving parallel market.