Bond:written evidence of debt issued by a company with the terms of payment spelled out. A bond differs from corporateshares of stock since bond payments are pre-determined and provide a final pay-off date, while stock dividends varydepending on profitability and corporate decisions to distribute. There are two types of such bonds: “registered” in which thename of the owner is recorded by the company and “bearer” in which interest payments are made to whomever is holdingthe bond. 2) written guaranty or pledge which is purchased from a bonding company (usually an insurance firm) or by anindividual as security (called a “bondsman”) to guarantee some form of performance, including showing up in court (“bailbond”), properly complete construction or other contract terms (“performance bond”), that the bonded party will not steal ormismanage funds, that a purchased article is the real thing, or that title is good. If there is a failure then the bonding company will make good up to the amount of the bond.
Zimbabwe is in the grip of a serious cash crunch, which has worsened gradually since the country abandoned its currency in 2009 for a basket of international currencies dominated by the United States dollar.
In May, the RBZ announced it would introduce bond notes as a 5% incentive to exporters. The apex bank said the incentive would be discontinued once exports reach the US$6 billion mark from US$1,125bn for the six months to June.
But the news received an adverse response from the market which said the new notes were part of a ploy by government to introduce the discarded Zimbabwe dollar which became worthless due to runaway inflation and low foreign currency reserves.