‘Zim to issue new coins, notes’

Zimbabwe will issue new notes and coins soon to replace the country’s quasi currency (bond note) that was introduced three years ago in an attempt to counter a crippling shortage of cash.

The return to a fully fledged local currency exchangeable outside the country’s borders will be backed by an undisclosed amount of foreign-exchange reserves, gold and loans, Finance Minister Prof Mthuli Ncube said in a recent interview in the capital, Harare.

A Treasury spokesman on Monday said there was a need to first compile data on the country’s reserves before commenting on how much foreign exchange would be used to back the new currency.

“We already have our own local currency, but this will be the first Zimbabwe dollar notes, which will trade at parity to the bond notes,” Prof Ncube said.

The country abandoned the Zimbabwe dollar in 2009, after a bout of hyperinflation, in favour of a basket of currencies including the US dollar and the rand. In a bid to deal with the subsequent cash shortages it introduced bond notes, and RTGS$ in their electronic form, which are not accepted outside the country.

Prof Ncube re-introduced the Zimbabwe dollar in June, accompanied by a ban on the use of foreign currencies. This led to a rapid erosion of spending power with the local dollar trading at almost 10 to the greenback. Bond notes were officially said to be at parity as recently as February. — Bloomberg