Home » Governance » Zim to Cash Rand Coins At Exchange Rate

The Reserve Bank of Zimbabwe has appointed Easy Link Money Transfer Agent to change rand coins for bond coins at the prevailing exchange rate of the rand to the United States dollar.The development would ensure the public get fair value for their rand coins, RBZ governor John Mangudya said yesterday. Easy Link Money Transfer Agent outlets would also, with immediate effect, supplement banks in the distribution of bond coins to the public without charging commission or withdrawal fees, Mangudya said.Easy Link Money Transfer is a money transfer division of the RBZ which was established in 2010. It operated under a wholly-owned subsidiary, Home Link.It is an agent of a leading and reputable international money transfer company, Western Union, which has an established network around the world.

The company has branches countrywide. “In addition to distributing bond coins, Easy Link Money Transfer Agent outlets shall, with immediate effect, accept to change rand coins for bond coins at the prevailing exchange rate of the Rand to the US dollar. “This policy measure is intended to ensure that the public get fair value for their rand coins unlike the current situation where consumers are being short changed,” said Mangudya.

The RBZ boss said the current system were bond coins are issued by the apex bank through banks for onward distribution to the public had challenges as some parts of the country were not able to access the coins. The RBZ unveiled the new bond coins in December last year as part of efforts to ease the shortage of change. The coins are indexed at par with the United States dollar and are available in denominations of one cent, five cents,10 cents and 25 cents worth US$10 million while the 50 cent coins are expected to be unveiled next month.

Previously, businesses rounded-off prices and gave consumers vouchers or sweets as change because the country lacked coins.

Introducing bond coins was a novel way of addressing the divisibility and store of value of money. The value of the bond coins is at par with United States cents. Already there is a feeling that the bond coins would replace the rand but economists said that would be mischievous as South Africa remained Zimbabwe’s biggest trading partner. “I don’t foresee that (ditching the rand) happening because South Africa remains our biggest trading partner. This is mischievous thinking that the bond coins will replace the rand. The coins are there to complement the US dollar and other currencies in use at the moment,” said an economist who declined to be named for professional reasons.

Zimbabwe adopted a hard currency regime in 2009 after ditching the Zimbabwe dollar which had become worthless due to hyper inflation. The US dollar and South African rand are the main currencies trading in the country, although about five other currencies are legal tender. The bond coins in circulations will not exceed US$50 million for the next three years, the RBZ has said. The RBZ last year arranged a US$50 million bond facility aimed at addressing coins shortages in the economy.

There is still a market resistance to the use of bond coins almost two months after the RBZ introduced them in the market. Ordinary people say instead of easing their plight, bond coins have instead made their lives difficult as vendors, commuter buses, tuck shops and other small businesses are not accepting them. Big businesses have embraced the bond coins but complained over the limited supply of the currency in the market.

Source : Financial Gazette