The Reserve Bank of Zimbabwe will start wiping all the bond notes in circulation forthwith and they expect to mop out close to ZWL$ 1.2 Billion that is currently in circulation.
The move comes at a time the government on Monday announced the abolishment of the multi-currency system and re-introduction of the Zimbabwe dollar as the sole legal tender.
The RBZ has also increased the current interest rate from 15% to 50 % in line with the inflation rate thus implying that those who had loans extended to them will now re-pay basing on the interbank rate.
Hereunder is RBZ’s pronouncements:
a) “Direct banks to transfer to the reserve bank the RTGS$ ZWL$ that they are holding as counterpart funds for the foreign currency historical or legacy debt that Government through the reserve bank is assuming at the rate of 1.1 between the RTGS$ and the US$. This measure is expected to mop around ZW$1.2 billion from the market by the end of this week.
b) Adjust the interest rate on the Reserve Bank overnight window upwards from the current 15% per annum to 50% per annum in line with inflation trends.
c) Remove administration limits on the operation of bureaux de change and on the cap on margins for banks for interbank foreign exchange transactions.
d) Put a vesting period of 90 days on disposal of dual listed securities or shares purchased by investors on the Zimbabwe Stock Exchange.
e) Increase supply of foreign currency into interbank foreign market by ensuring at least 50% of the surrender portion of foreign currency is sold to the interbank market. This will be supplemented by the use of Letters of Credit (LCs) for the importation of essential commodities that include fuel, cooking oil and wheat. The bank has put in place LCs amounting to US$ 330 million for these purposes.