3 August 2017

Zimbabwe: Zim Bond Notes to Reach Half a Billion - Central Bank Chief

Photo: Jerry Chifamba/AllAfrica
Harare CBD.

Zimbabwe's central bank chief says the country will print an extra 300 million dollars' worth of bond notes, despite an earlier promise not to exceed the 200 million figure.

Any mention of money printing in Zimbabwe fuels fears of a return to hyper-inflation and the black market trade in scarce foreign currency that peaked in 2008.

Bond notes were introduced last November to ease chronic shortages of US dollars, and to encourage exporters who earn the country foreign currency.

'Drip feed basis'

The central bank has so far fed 175 million dollars' worth of the notes, in denominations of two and five dollars, into the economy.

But in a monetary policy statement on Wednesday, Central Bank Chief John Mangudya said another 300 million dollars of the notes would be released, backed, like the first 200 million, by a loan from the Cairo-based African Export-Import Bank (Afreximbank).

"As like under the 200 million US-dollar facility, the (central) bank will release the bond notes into the market on a drip-feed basis," he said.

'Inefficient circulation of money'

Until now, bond notes have largely kept their value against the US dollar because of their scarcity. There are fears that having extra notes on the market will fuel a black market trade in US dollars.

Massive bank queues persist outside most commercial banks around the country, as depositors battle to withdraw their money, mostly in bond notes and coins.

Mangudya said one billion dollars' worth of cash was circulating in Zimbabwe, but was mostly in the informal sector.

"The inefficient circulation of money is significantly causing shortages in the formal economy and the banks," he said, adding that individual Zimbabweans would only be able to take 2 000 US dollars with them on foreign trips.

News24

Zimbabwe

10 Times Grace Mugabe Came Out Guns Blazing Against VP Mnangagwa

First Lady Grace Mugabe's entry into the political fray has created a mixture of excitement, anxiety and consternation… Read more »

Copyright © 2017 News24Wire. 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.