Sunday 22 October 2017

Zimbabwe prints bond notes worth R4 billion

Zimbabwe prints bond notes worth R4 billion
(Independent Online 08/04/17)
Zimbabwe prints bond notes worth R4 billion

Zimbabwe will print a further $300 million (R4 billion) of its latest currency known as bond notes, according to central bank governor John Mangudya.
He said this tranche of cash notes will be backed by Afreximbank, bringing Zimbabwe’s debt for cash to the Cairo-based bank to $550m.

Zimbabwe is chronically short of cash and foreign currency for imports.

Mangudya made this announcement in in a monetary policy statement on Wednesday. He also said Zimbabwe was looking for a further $600m loan from Afreximbank to boost cash held in nostro accounts of commercial banks.

Mangudya linked introduction of bond notes in November to a 5% bonus for exporters, and he said this had boosted foreign earnings by more than 14%.

“Building on the success on the export incentive scheme in securing exports of goods and services and diaspora remittances, the bank found it imperative to increase the scheme by a further $300m under a standby liquidity support facility which is being finalised by the Afreximbank,” Mangudya said.

He also insisted that the central bank was not printing money in an uncontrolled way as happened prior to 2008 when the Zimbabwe dollar collapsed under hyperinflation. Zimbabwe then adopted several foreign cash notes, including the rand. Today most Zimbabweans choose to use the US dollar.

There is a growing black market for US dollar cash notes against debit cards and electronic transfers.

Pretoria News

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