In October this year, Zimbabwe’s central bank will start circulating local bank notes, although the country will not be returning to a domestic currency abandoned in 2009, and will continue to use the dollar and other foreign currencies. John Mangudya, Reserve Bank of Zimbabwe governor, described the local notes as vouchers intended to boost exports and generate foreign exchange. Mangudya said in a statement:
"The export vouchers are expected to be disbursed in October 2016. The multi-currency system is here to stay. We have assured the public before and we would like to continue to do so that the country's economic fundamentals do not support the return to the Zimbabwe dollar."
Despite the governor's reassurances, Zimbabweans are concerned that introducing "bond notes" to ease dollar shortages could lead to a similar situation as occurred in 2008, when the frenzied printing of cash led to inflation reaching 500 billion percent.
According to Reuters, Zimbabwe has faced a shortage of bank notes since March, unnerving depositors. Long queues have begun to form outside banks, which have imposed daily withdrawal limits of as little as $50.
- Stay connected, up to date and in the loop on what is happening in the world of finance and keep track of newly published expert insights and interviews with CFOs and CEOs. Become an online member and receive our newsletter, follow us on Twitter, like us on Facebook and join us on LinkedIn.
