The uptake of bond coins in Zimbabwe has improved in the past few weeks due to a positive consumer perception over their value against the United States dollar.
South Africa’s slipping rand has proved positive for bond coins, with more Zimbabweans agreeing to use the previously-unpopular new currency.
Bond coins were introduced by the Reserve Bank of Zimbabwe in December 2014. In denominations of 1, 5, 10, 25 and now 50 cents, the coins were introduced to make it easier for shops and traders to issue change. They can only be used in Zimbabwe.
The bond coins had initially been resisted by the market but all that has changed.
Users were slow on the uptake, fearing the coins would quickly become as worthless as Zimbabwe’s infamous “bearer cheques”, introduced during the hyperinflation era up to 2008.
The Standard reported that the rand’s decline in South Africa “boosted bond coins in the local economy” because their value was seen as stable. Rand coins have until very recently been the preferred currency of change in Zimbabwe, usually traded at a rate of 10: 1 US.
Confederation of Zimbabwe Retailers president Denford Mutashu told the Standard: “Consumers now prefer the bond coins to the rand because of [the rand’s] fluctuations.”
Some vendors are reportedly hoarding bond coins to sell them to street money traders.
Previously, only large Zimbabwean supermarket chains would accept bond coins as part payment, but now many small stores take them.