Suspicion As Banks Foist Bonded Coins On Depositors

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by Staff Reporter

  • Broke govt is now printing money (minting the coins)
  • Plan underway to give banks the coins which in turn forces them on depositors
  • Fall in Rand has forced commuter operators to ask for them instead of Rand coins
    RBZ governor, John Mangudya

    RBZ governor, John Mangudya

HARARE-Zimbabweans, always suspicious of President Robert Mugabe’s every move, were this week concerned when some financial institutions started forcing depositors to accept a portion of their withdrawals in the form of bonded coins.

The Zimbabwenewslive.com has established that small financial institutions that usually face serious cash shortages such as POSB Bank, MetBank and ZB Buildings Society were among those that since last week, have been insisting that depositors accept a certain portion of their withdrawals in the form of bonded coins.

“I wanted to withdraw $150 from my account, but I was surprised when the teller paid me $145 in US dollar notes and the remaining $5 in 5cent denominations of bond coins,” said one POSB Bank customer. “The teller said that was the instruction given to them. If you refuse, she would ask you to make the withdrawal at an ATM, but the machines always do not have cash,” he added.

Another one said from the $50 she had withdrawn, $3 was in bond coins.

In December last year, when the Reserve Bank of Zimbabwe (RBZ) unveiled the $10 million worth of bonded coins, sceptics warned that this could be a trick to test the waters before slowly but surely re-introducing the Zimbabwe Dollar, but RBZ chief John Mangudya insisted that this move was strictly meant to ease change challenges.

“It is clear the coins are necessary in any economy for providing change and to ensure that money is divisible,” Mangudya said then.

“Consumers benefit with a low denomination coin as it is proven worldwide that businesses would raise prices without the penny or cent. Coins are therefore essential to eliminate the “rounding tax” that reduces consumers’ purchasing power.”

The bond coins are indexed at par or one-to-one with the US cents and were meant to circulate side-by-side with all currencies under the country’s multiple currency system.

Only traders and supermarket chains were expected to approach banks to exchange bank notes into these 1cent, 5cent, 10cent, 20cent and 25cent bond coins so that they could give their customers their exact change, instead of sweets, ball pens, razors and some such small items that they would give because of the shortage of coins.

The latest move by banks to foist the coins to members of the public has heightened fears that the cash-strapped government—which previously survived by printing money—could be pushing in more coins in the market than the originally announced $10 million in order to raise cash. A fortnight ago the RBZ introduced a 50cent bond coin.

Inside sources have revealed that the broke Government is now minting the coins and giving them to banks which in turn forces them on depositors.

The bond coin regime has been facing stiff resistance from sceptical Zimbabweans who still have bitter memories of their ZimDollar error when inflation chalked more than 500 billion percent.

 

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