12 May 2017

Zimbabwe: Bond Notes Weaken Against U.S. Dollar

Photo: allafrica.com
Zimbabwe's bond notes and U.S. dollar notes.

ZIMBABWE'S bond notes continued losing value to the United States unit with forex dealers in the black market discounting the local currency by as much as 15-20% this week for electronic transactions.

The bond notes were introduced last year to help ease cash shortages.

This is despite assurances by the central bank the bond note, which is said to be backed by a US$200 million Afreximbank bond facility, is at par with the greenback.

The bond notes were introduced last year to help ease cash shortages in the country after banks' nostro accounts ran dry.

Rates for electronic and mobile transactions -- transfers, EcoCash and Zipit -- ranged between 15-20% this week.

On cash transactions, bond notes are trading at a discount of 5%.

Instead of a par value of 1:1, dealers are, for example, selling US$100 for $105 in bond notes.

The cash rate fluctuates to as low a minimum of 4% depending on the supply.

Bond notes scarcity has helped create price stability in the economy at a time the market is betting on Mangudya to over-supply the market.

Just this week, Mangudya dispelled social media reports he planned to introduce higher-denominated bond notes.

His comments came against social media reports the RBZ wanted to introduce more bond notes in US$10, US$20 and US$50 denominations to ease the cash crisis gripping the nation and would prohibit the use of MasterCard and Visa Card outside the country.

Mangudya said the statements were also calculated at discrediting government and the "bank's progressive efforts to stabilise the economy and fuel chaos in the economy by targeting the sensitive financial sector".


UK Embassy Exposes MDC Alliance Lies

The United Kingdom embassy in Zimbabwe yesterday exposed lies by the MDC Alliance that the Zimbabwe Electoral Commission… Read more »

See What Everyone is Watching

Copyright © 2017 Zimbabwe Independent. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.