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$160 million bond notes in circulation

by Staff reporter
18 Jun 2017 at 09:52hrs | Views
THE Reserve Bank of Zimbabwe (RBZ) has released a total US$160 million worth of bond notes into circulation since last November as part of measures to ease shortages of money in the country.

The Sunday Mail has gathered that at least US$60 million worth of bond notes were injected into the market since March this year to boost the U$100 million that was already in circulation.

Bond notes — introduced in November last year — are backed by a US$200 million loan facility from the African Export-Import Bank (Afreximbank).

The surrogate currency was released as an export incentive to exporters and is meant to stimulate an increase in exports.

Speaking to The Sunday Mail on the sidelines of the Standard Chartered Bank's Africa Unity Square Branch launch last week, RBZ Deputy Governor Dr Kupukile Mlambo said the central bank will continue to release bond notes in batches in tandem with foreign currency generated from exports.

"On the bond notes (issue), it is important to mention that there is no way it would be prudent for us to print too much because we get hyperinflation Nobody wants that," said Dr Mlambo.

"The central bank is careful on how it manages the bond notes… I think it is about US$160 million (in circulation now) if I am not wrong," he said.

Asked when the remaining US$40 million of the US$200 million worth of bond notes would be released, Dr Mlambo said, "That will be determined by the export revenues coming in."

Dr Mlambo implored local firms to export more so as to solve the shortages of money.

"We need to understand that the RBZ does not print US dollars," he said.

"The solution to the cash crisis is not from printing any money because we can't print it.

''The solution is in us exporting more.

"That is where our foreign currency comes from. We need to understand that what we are calling a cash crisis is a scarcity of foreign currency.

"Therefore, the only way to get foreign currency is to export more."

Dr Mlambo urged depositors to use plastic money in order to reduce pressure on physical cash.

The call comes at a time when bank queues continue to be the order of the day as depositors, especially pensioners, seek to withdraw their pay-outs.

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Source - zimpapers

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