Zimbabwe bond note black market booms across borders


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Garikai, 35, shuffles wads of green notes. A sizeable crowd gathers around him. They are astonished.

It is their first time seeing Zimbabwe´s bond notes, the disputed currency the Zimbabwean government claims is valued at parity with the US dollar.

Since they were first printed in November 2016, bond notes have fuelled confusion, inflation and wild speculation in the economically troubled southern African nation.

Garikai, however, is holding his demonstration in Johannesburg, South Africa, some 2000 kilometres away.

There, bond notes are not legal currency but are in high demand from travellers headed across the border to Zimbabwe.

Traders like Garikai, who hides his name to protect his trade, are making a mint off of Zimbabwe’s chronic cash shortages.

According to Zimbabwe Reserve Bank governor John Mangudya, bond notes are only legal currency in Zimbabwe and not tradeable outside the country´s borders.

Currency smuggling rings are not listening, however, and are exporting the currency for profit while squeezing the already cash-strapped economy.

“Zimbabweans living in the diaspora in South Africa do not want to stand in long bank queues when they return home. So they stock up on bond notes in exile before boarding buses home,” Garikai explains.

Bond notes are a surrogate currency.

In theory their value is at par with the US dollar and they are guaranteed by a loan from Egypt’s AFRIMEX bank.

However their value has plunged domestically as Zimbabweans have quickly discovered that in practice they are not convertible into dollars.

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The Insider

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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