Zim raises $300m to print bond notes

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 would 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 a monetary policy statement on Wednesday. He added that Zimbabwe was looking for a further $600m loan from Afreximbank to boost cash held in nostro accounts of commercial banks.

Mangudya linked the introduction of bond notes in November last year to a 5% bonus for exporters, and he said it had boosted foreign earnings by at least 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,” he 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 dollar.

There is a growing black market for dollar cash notes against debit cards and electronic transfers. Bond notes have no value outside Zimbabwe but there is a swift trade in them in border towns such as Musina.