Zimbabwe plans to print its own version of US dollars noted to ease a serious cash shortage in the country.
The new currency, known as bond notes, will be backed by $200 million support from the African Export-Import Bank, the country’s central bank governor John Mangudya said.
The bond notes, which will be in The specially-designed two, five, 10 and 20 dollar notes will have the same value as their US dollar equivalents, will be introduces in the next two months,VOA reported.
A family of bond coins was introduced in December 2014, when the central bank introduced the 1c, 5c, 10c and 25c family of bond coins, and in March 2015, introduced the 50c which he said was to boost price competitiveness.
“In order to mitigate against possible abuses of this facility through capital flight, this facility shall be granted to qualifying foreign exchange earners in bond coins and notes which shall continue to operate alongside the currencies within this multi-currency system and at par with the United States dollar,” Jacaranda FM quoted Mangudya saying.
Initially bond coins were rarely used in Zimbabwe, but a decline in the South African rand – the country’s largest trade partner – in recent months has made new currency popular.
Zimbabwe, which was once referred as the “breadbasket of Africa” due to the abundance of food its mostly white farmers exported to other nations, started using foreign currencies like the US dollar and the South African rand in 2009, after the local currency was ruined by hyperinflation.
The country’s economic crisis hit a bottom in 2008, when the inflation rate sky rocketed to 500 billion percent. Zimbabweans had to carry bagfuls of banknotes to the shops to buy basic goods like bread and milk, while prices doubled at least twice a day.
There are at least eight foreign currencies that are used as legal tender in the country including the Australian dollar, British pound sterling, Botswana pula, the Euro, Indian rupee, Chinese yuan and Japanese yen.