Zim taps bond mar­ket

The Times (South Africa) - - BUSINESS - NHLALO NDABA

ZIM­BABWE’S cen­tral bank plans to in­tro­duce more bond notes in an at­tempt to plug the coun­try’s wors­en­ing cash short­ages.

The cur­rent bond notes are backed by Egypt’s Afrex­im­bank through a $200-mil­lion (about R2.6-bil­lion) loan fa­cil­ity.

Ac­cord­ing to the Re­serve Bank of Zim­babwe gov­er­nor John Man­gudya bond notes worth $170-mil­lion are in cir­cu­la­tion and the cen­tral bank is seek­ing an ad­di­tional $500-mil­lion fa­cil­ity for a sec­ond batch of notes.

“We are ne­go­ti­at­ing for a loan fa­cil­ity to the tune of $500-mil­lion,” Man­gudya said at a busi­ness sem­i­nar last week.

The IMF in its con­sul­ta­tions warned that the use of the bond notes would wipe hard cur­ren­cies from the mar­ket.

“US dol­lars would be­come in­creas­ingly scarce or only be avail­able at a pre­mium,” said the IMF.

A Harare banker said: “Money is not a medium of ex­change any more in Zim­babwe. It’s a com­mod­ity.”

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