The cash-strapped ZANU-PF government has finally succumbed to its inevitable failure and has predictably decided to re-introduce the Zimbabwe dollar in the midst of an unprecedended liquidity crisis in the recent history of Zimbabwe.
This decision has been muted by the RBZ with the hope of easing the liquidity crisis that is engulfing the economy. The RBZ will mint Z$2, Z$5, Z$10, Z$20 Bond Notes which are at parity with the US dollar.
In addition, the Central Bank will convert 40% of all new US dollar receipts into South African Rands. The bank has with immediate effect introduced restrictive measures on all imports. To disguise the fact of the return of the Zim dollar, the RBZ says the Zim Bond Notes will be backed by a previous US$200 million dollar Afrexim bank loan facility. This is hogwash. If the intention is to increase liquidity, why not simply release the US$200 million into the banking system?