This week the $2 bond note was the latest casualty of inflation. The business community and now the wider public is no longer accepting the conspicuously green notes calling them a burden. This means the notes have effectively been demonetised and will now join all the notes and coins in Zimbabwe’s flourishing money graveyard. The RBZ, however, are having none of it, they insist both the $2 bond note and its fellow deceased coins are still very much legal tender.
While the RBZ’s statement includes the $5,$10 and $20 notes in their statement they didn’t have to. All three are very much still accepted by most people and businesses as legal tender. That ship has however sailed when it comes to the other members of the family. Unless inflation falls significantly, and that does seem unlikely at the moment, there is very little chance the public will accept the note and coins.
Now you can only use them to pay the government
The real value of bond notes lie in the fact that they are worth more than RTGS dollars. Cash sells at a premium because of the freedom it offers. Unfortunately the only businesses that are taking bond notes are government departments, municipal offices and a few big supermarkets will also grudgingly take them off your hands. Therein lies the problem, these businesses are by the book businesses and organisations that follow the letter of the law. They do not give cash discounts if you pay in cash. To them a dollar in the bank is the same as a dollar in hand.
Which brings us to the other problem, due to inflation you need bag fulls of this money to buy normal groceries. If civil servants were getting paid in $2 notes they would need satchels. For a note that is now worth the same as RTGS dollars there is really no advantage to having it in your pocket. So no one wants it legal tender or not.
We have seen this before with trillion dollar notes and other old money. When people say they don’t want it you are sadly stuck with it. I should know I have a shoe-box box full of $2 notes and other old Zimbabwean money from over a decade ago. It was legal tender too-maybe by law it still is.
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