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Finance Minister Mthuli Ncube Finally Gives In, Says Bond Notes And US Dollars Are Not Equal

Zimbabwe bond notes and USD SI 127 of 2021

It has been an open secret that bond notes (coins) are not at par with US dollars, although the central bank, the Reserve Bank of Zimbabwe disputed that. Since the bond notes were introduced the RBZ has been fooling itself saying that the two are the same but the market disputed it, signified by the proliferation of cash burning.

Now it looks like reality has finally set in for the powers that be, with the Finance Minister Mthuli Ncube saying that he has finally admitted that bond notes and US dollars are not the same. In his speech at Chatham House, Finance Minister Mthuli Ncube said

The market is setting the pace. What is left for us is choreography and management of the economic fundamentals. The economy has dollarised. RTGS [real time gross settlement] balances are over $6 billion. The market is doing everything, we are going through a transition. The market has said these currencies [US dollar and bond notes] are not at par. I don’t want to argue with the market. The bond notes will, at some point, have to be demonetised and I cannot tell you (when that will be).

 

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