Zim raises $300m to print bond notes

The Star Early Edition - - WORLD - PETA THORNYCROFT

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.

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