Cinamasa says “bond notes” to stay for now

Finance Minister Patrick Chinamasa

HARARE (Reuters) – Zimbabwe will not stop using “bond notes”, a domestic quasi-currency, until the economy fully recovers, Finance Minister Patrick Chinamasa said on Wednesday.

The southern African nation in November 2016 started using bond notes in a bid to ease shortages of U.S. dollars, the country’s official currency since 2009.

Since Emmerson Mnangagwa became president last November in the wake of a de facto military coup that removed 93-year-old Robert Mugabe, there has been speculation that bond notes would be scrapped.

“Bond notes will stay until we have our own local currency,” Chinamasa told a business meeting in Harare.

The conditions needed to bring back a local currency include foreign currency reserves of more than three months, a lower budget deficit and higher exports and industrial production, Chinamasa said.

The bond notes, which are also in short supply, are pegged at par with the U.S. dollar but trade at a discount on the black market. On Wednesday $1 was equivalent to $1.25 in bond notes.