The governor of the Reserve Bank of Zimbabwe said that the country
will soon print its own version of the U.S. dollar in an effort to
ease the country’s cash shortage. A May 4 press release by governor
John Mangudya said that specially designed $2, $5, $10 and $20 notes
will have the same value as their U.S. dollar equivalents. The money
will be known as “bond notes” and will be backed by $200 million in
support from the Africa Export-Import Bank.
Zimbabwe’s high inflation rates, which led to notes bearing
denominations in the billions, forced the country to scrap its
currency altogether in 2009. As its old currency became popular with
collectors, foreign currencies, especially the U.S. dollar, and to a
lesser extent, the South Africa rand and Chinese yuan, came into
widespread use in Zimbabwe. The dollar was mainly used for larger
transactions with the rand the preferred unit of small change.
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Now the bank wants to see people using more rands since much of the
country’s trade is with South Africa. But since so many prices and
contracts are set in U.S. dollars and there is a shortage of U.S.
currency, the hope is that the bond notes will be accepted on a
The BBC reports that people are hesitant to hold rands as they are
not sure that the South African currency will maintain its value
against the dollar.
Mangudya, the Zimbabwe Herald reports, said that the bank was still
working on a design for the new notes, but when they will be ready is
not yet announced. New 1-, 5-, 10-, 25- and 50-cent bond coins of
simple but distinctive designs were introduced from December 2014 to
March 2015 to facilitate small transactions. They have been popular
enough to replace the lollipops, chewing gum and pens that some shops
were using as small change substitutes.