Zimbabwe: Bond Notes - the Chickens Are Coming Home to Roost

Last week's crashing of the bond note against the United States dollar led to market panic while at the same time evoking memories of the country's unprecedented economic meltdown and hyperinflation era which peaked in 2008.

Zimbabwe adopted a basket of multiple currencies in 2009 after the runaway inflation liquidated the local currency which has since been demonitised. An export collapse and yawning trade deficit resulted in shortages of the greenback forcing government to introduce US$200 million bond notes which were ostensibly backed on an African Export and Import Bank facility (Afreximbank).

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