The Sunday Mail
Classical economists note that throughout the centuries, many commodities have been selected as money on the market. On the Atlantic sea coast of colonial North America fish has been chosen as money, in the Old Northwest it was beaver, and tobacco in the Southern colonies.
In other cultures, salt, sugar, cattle, iron hoes, tea and even cowrie shells have been used as money. Those fortunate to travel around the world have come across many banks that display money museums which exhibit various forms of money over the centuries.
So, let’s debunk the myth or whatever the desperate opposition activists are trying to sell to the people — there is nothing unusual and nothing new in introducing bond notes in Zimbabwe. What kind of people are we to resist the introduction of “our currency?”
However, what is gratifying is that while the prophets of doom tried everything they can to stop the introduction of bond notes, Zimbabweans have accepted the notes as a currency.
That one is a done deal and kudos to the Reserve Bank of Zimbabwe for introducing bond notes, but then as they always say; “the devil is in the detail.”
Currency issues hinge mainly on perception and in this regard, the central bank has to move in swiftly to explain, first the anomalies that have been identified by the populace with regards to the physical features of the bond notes and secondly, the long queues at the banks that seem to be getting longer by the day.
While the generality of the populace has accepted the bond notes, the RBZ should not take people for granted because things can go horribly wrong anytime. Seeing people, especially the elderly seated in queues one gets the feeling that someone somewhere is beginning to take people for granted.
Before the introduction of bond notes, the gospel from the RBZ was that this was meant to ease the cash crisis and so when the notes were introduced last week, there was justifiable excitement that queues at the banks would disappear. This has not happened and in fact, it looks like the queues have gotten longer.
Without anyone bothering to explain, we have come to the conclusion that the queues are a result of month-end pressures. We really hope that we are spot-on on this one.
We are fully aware that these are early days and so we can’t conclusively judge the central bank, but it is also important not to stretch the people’s patience.
The prophets of doom have been sweating in a bid to stop the introduction of bond notes and they have failed. Let’s not give them ammunition to target the people’s perceptions and patience.
In his Mid-Term Monetary Policy Statement, the RBZ governor, Dr John Mangudya said the central bank was targeting to release about $75 million worth of bond notes by the end of the year and we expect this to be put into motion expeditiously.
There should be no room for people to start questioning whether bond notes are indeed a solution to the cash shortages that the country has been experiencing over the past few months.
We are also fully aware that the RBZ cannot and should not flood the market with the bond notes because this will create another problem, but as things stand, it looks like demand for bond notes is far outstripping supply and we are tinkering on the verge of creating doubts in the mind of the people.
What is even more worrying is that the RBZ for reasons best known to itself, has chosen to remain silent on these troubling issues yet the people are calling for answers and assurances.
Speaking at the Affirmative Action Group conference that was held in Harare a few days ago, flamboyant businessman, Philip Chiyangwa had this to say about bond notes: “Surely, how can you print a paper and sign it and then tell me it is money? No, no, no. We need to challenge some of these things.”
Chiyangwa is not one of the best economists this country can boost of, but if a businessman of his stature holds such views about bond notes, then the RBZ should know that it has a lot of explaining to do.
Its outreach programmes are clearly not enough and one gets the feeling that the central bank is operating on a shoe-string budget that is holding it from going all out to increase visibility on the market.
A currency should be highly durable, so that it can serve as a store of value for a long time. The holder of money should not only be assured of being able to purchase other products right now, but also indefinitely into the future.
From his utterances, Chiyangwa doesn’t seem to see bond notes as durable in terms of storing value. He still thinks bond notes are just pieces of paper.
Of course we need to forgive Chiyangwa for his simplistic views, but his statement shows that there is a certain constituency that the RBZ outreach programmes have missed.
EDITORIAL COMMENT: RBZ: The devil is always in the detail
The Sunday Mail
Classical economists note that throughout the centuries, many commodities have been selected as money on the market. On the Atlantic sea coast of colonial North America fish has been chosen as money, in the Old Northwest it was beaver, and tobacco in the Southern colonies.
In other cultures, salt, sugar, cattle, iron hoes, tea and even cowrie shells have been used as money. Those fortunate to travel around the world have come across many banks that display money museums which exhibit various forms of money over the centuries.
So, let’s debunk the myth or whatever the desperate opposition activists are trying to sell to the people — there is nothing unusual and nothing new in introducing bond notes in Zimbabwe. What kind of people are we to resist the introduction of “our currency?”
However, what is gratifying is that while the prophets of doom tried everything they can to stop the introduction of bond notes, Zimbabweans have accepted the notes as a currency.
That one is a done deal and kudos to the Reserve Bank of Zimbabwe for introducing bond notes, but then as they always say; “the devil is in the detail.”
Currency issues hinge mainly on perception and in this regard, the central bank has to move in swiftly to explain, first the anomalies that have been identified by the populace with regards to the physical features of the bond notes and secondly, the long queues at the banks that seem to be getting longer by the day.
While the generality of the populace has accepted the bond notes, the RBZ should not take people for granted because things can go horribly wrong anytime. Seeing people, especially the elderly seated in queues one gets the feeling that someone somewhere is beginning to take people for granted.
Before the introduction of bond notes, the gospel from the RBZ was that this was meant to ease the cash crisis and so when the notes were introduced last week, there was justifiable excitement that queues at the banks would disappear. This has not happened and in fact, it looks like the queues have gotten longer.
Without anyone bothering to explain, we have come to the conclusion that the queues are a result of month-end pressures. We really hope that we are spot-on on this one.
We are fully aware that these are early days and so we can’t conclusively judge the central bank, but it is also important not to stretch the people’s patience.
The prophets of doom have been sweating in a bid to stop the introduction of bond notes and they have failed. Let’s not give them ammunition to target the people’s perceptions and patience.
In his Mid-Term Monetary Policy Statement, the RBZ governor, Dr John Mangudya said the central bank was targeting to release about $75 million worth of bond notes by the end of the year and we expect this to be put into motion expeditiously.
There should be no room for people to start questioning whether bond notes are indeed a solution to the cash shortages that the country has been experiencing over the past few months.
We are also fully aware that the RBZ cannot and should not flood the market with the bond notes because this will create another problem, but as things stand, it looks like demand for bond notes is far outstripping supply and we are tinkering on the verge of creating doubts in the mind of the people.
What is even more worrying is that the RBZ for reasons best known to itself, has chosen to remain silent on these troubling issues yet the people are calling for answers and assurances.
Speaking at the Affirmative Action Group conference that was held in Harare a few days ago, flamboyant businessman, Philip Chiyangwa had this to say about bond notes: “Surely, how can you print a paper and sign it and then tell me it is money? No, no, no. We need to challenge some of these things.”
Chiyangwa is not one of the best economists this country can boost of, but if a businessman of his stature holds such views about bond notes, then the RBZ should know that it has a lot of explaining to do.
Its outreach programmes are clearly not enough and one gets the feeling that the central bank is operating on a shoe-string budget that is holding it from going all out to increase visibility on the market.
A currency should be highly durable, so that it can serve as a store of value for a long time. The holder of money should not only be assured of being able to purchase other products right now, but also indefinitely into the future.
From his utterances, Chiyangwa doesn’t seem to see bond notes as durable in terms of storing value. He still thinks bond notes are just pieces of paper.
Of course we need to forgive Chiyangwa for his simplistic views, but his statement shows that there is a certain constituency that the RBZ outreach programmes have missed.
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