11/04/2017 06:28 BST | Updated 11/04/2017 06:38 BST

Zimbabwe Refuses To Release More Bond Notes Amid Cash Shortages

"We made it very clear that the bond notes are only issued relative to exports – no exports, no bond notes."

Philimon Bulawayo / Reuters
An forex dealer offers bond notes and South African Rand outside a bank in the central business district in Harare, Zimbabwe, February 24, 2017.

Zimbabwe's Finance Minister Patrick Chinamasa has refused to add more bond notes into the southern African country's struggling market, insisting that the country's only solution was to increase exports, said a report on Monday.

According to NewsDay, Chinamasa told the country's national assembly last week that he was against a further release of the bond notes into the market, after lawmakers urged him to release the entire $200m Afreximbank backed surrogate currency.

"I do not support that we should issue all the bond notes up to $200 million into the market. We made it very clear that the bond notes are only issued relative to exports –- no exports, no bond notes in the market, and we are going to stick by that because they are coming in as an incentive to exports," Chinamasa was quoted as saying.

This comes after the Morgan Tsvangirai-led opposition party Movement for Democratic Change (MDC-T) lawmaker Trevor Saruwaka said that Zimbabweans in the diaspora were being charged exorbitant amounts when they sent money back home.

He argued that this was discouraging them from sending money, as they were not being given the promised 5 percent incentive.

President Robert Mugabe's central bank introduced 10 million "bond notes" and two million "bond coins" into the system in the hope of ending a biting cash crisis, late last year.

But, just a day after the dreaded surrogate currency was introduced, Chinamasa said that the "bond notes" were not meeting the demand for cash.

He, however, reportedly promised that the country's cash problems were going to be met in due course.

According to Money Web, the cash strapped Mugabe government started circulating $5 "bond notes" worth 15m, thus, bringing the total of the introduced bond notes to $88m in February.

But according to News24. despite this, the bond notes were faced with worsening forex squeeze, meaning there was "a recipe for exchange rate pressure between bond notes and the dollar".

When the government first introduced the surrogate currency it insisted that the bond note were 1:1 to the US dollar.

But as forex in the official market dries up, as companies that depend on imports find they're not able to send money out of Zimbabwe, there are real fears the black market will reemerge, sending the value of the bond note plummeting and taking Zimbabwe back to the days of hyperinflation, seen between 2006-8.

An unnamed economist was quoted as saying: "If you are desperate, you will buy the dollar at a higher exchange rate."