More bond notes coming

THE Reserve Bank of Zimbabwe (RBZ) will soon release $300 million worth of bond notes into the market under a new facility secured from the Africa Export and Import Bank (Afreximbank) to ease the cash shortages the country is experiencing.

BY TARISAI MANDIZHA/FIDELITY MHLANGA

Central bank governor John Mangudya presents the Monetary Policy Statement at the Reserve Bank of Zimbabwe yesterday
Central bank governor John Mangudya presents the Monetary Policy Statement at the Reserve Bank of Zimbabwe yesterday

The move, which will bring the total bond notes in circulation to about $500m, comes at a time the apex bank has already released $175m of the $200m secured from the same
bank in May last year.

Presenting the mid-year monetary policy yesterday, RBZ governor, John Mangudya said once concluded, bond notes would be drip-fed into the market.

“As like under the $200 million facility, the central bank will release the bond notes into the market on a drip-feed basis,” he said.

As first reported by our sister paper, The Standard, Mangudya noted that the central bank found it imperative to extend the facility after the “success” of the current scheme, which he said had increased exports by 14% since its inception last year.

“Zimbabwe needs to produce and create exports. Foreign exchange must be earned and spent wisely in order to survive,” he said.

“There is no substitute to this narrative. We cannot further isolate ourselves by doing nothing and undermining the economy by perpetuating market indiscipline.

“It is against this philosophy and building on the success of the 2,5% to 5% export incentive subsidy scheme in securing and increasing exports of goods and services that the bank found it imperative to extend and enhance the export incentive scheme by a further $300 million under a standby liquidity support facility, which is being finalised right now by Afreximbank.”

The RBZ boss said there were $25m worth of bond coins, $175m in bond notes and approximately $800m in various currencies under the multicurrency regime in circulation, to give a total of around $1 billion.

The move will heighten fears by economic analysts, who have always suspected the government will pour in more bond notes to fund the 2018 general elections.

Commenting on the appointment of an independent board to monitor the bond notes in circulation, Mangudya said the RBZ oversight board, as opposed to the earlier promised independent board, now had the mandate to monitor the bond notes in circulation.

“The committee on bond notes: What we have said is that we want a monetary committee, but upon going back to the board, we found out that within the board, there is an independent committee, composed of only independent board members called the bank audit, and oversight committee for the RBZ, where auditors report to and we found out that committee’s mandate is to exactly do what we thought the oversight committee was going to do,” he said.

“This other committee is there by statute. It is there in the RBZ Act and it is very clear on its role.

“We think the committee might be subservient to the oversight committee, therefore, they are going to be two things, duplication and this committee we are going to put in place is of a lesser value than the one already in place by statute.

“The role of what we expected to be done was subsumed or embodied by the audit oversight committee of the RBZ made up of independent directors and the deputy chairperson of the RBZ is the chairperson of the committee.”

Following the introduction of bond notes, which were first announced in May 2016, Mangudya told Zimbabweans that he would appoint an independent body to monitor the printing of the surrogate currency.

But eight months after the bond notes hit the market in November 2016, the governor announced that the bank audit and oversight committee would take over that duty.

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25 Comments

  1. Come on guys

  2. No choice Mr Governor although more problems will arise as a result of more bonds on the market. However, you have tried to manage the supply side which has kept the pricing structures somehow un-distorted.

  3. People have accepted the Zim$ aka bond notes and coins, the RBZ must increase the amount in circulation in order ease cash shortages. Zanu chiororo

  4. Zvazoshata manje. Why no just print a proper Zim dollar and drip-feed it.

    1. Nhai? Taura hako

  5. black market will soon be on the rise. I am off to withdraw my money so that I buy the rand or use dollar.

  6. Inga black market iriko wani chinhu chimwe chine 2 prices of bonds and US$ enda pama eco$ shops mari inenge iri makomo makomo asi anoti 20% of withdrawer saka whos suffer nhamo ye murombo kutangira pakurumurwa ne mhiripiri yetotondedzwa ne mvura pakaipa hameno regai tione

  7. Question. How did money supply increase between 2009 and 2011?

    1. Good question we used to withdraw $3000USD at one go

  8. Singing Hosea Chipanga song: Mwari wa Abraham, Mwari wa Isaac, Mwari wa Jacob, Zim dollar kuchema.
    Mwari wa Abraham, Mwari wa Isaac, Mwari wa Jacob, Zim dollar kuchema.
    Mwari wa Abraham, Mwari wa Isaac, Mwari wa Jacob, Zim dollar kuchema.

  9. I saw this coming anyway., Lets brace for Zim dollar. They getting cash for zanu to campaign musanyeperwe imi. Ko zvavakamboti kana zvikaramba i resign, where is the resignation letter Mr Sir.

  10. Singing Hosea Chipanga song: Baba Abraham, tumirai Lazaro azotidzimura tatsva nemoto.
    Baba Abraham, tumirai Lazaro azotidzimura tatsva nemoto.
    Baba Abraham, tumirai Lazaro, azotidzimura tatsva nemoto.

  11. The more notes being printed into circulation the more problems to arise. such as inflation,valueless of the bond,shortages of food stuffs etc.

  12. We never saw tangible proof that the current bond notes are backed by this ”ghost'” facility from Eximbank..now this..Get ready for empty shelves as Supermarkets will not be able to pay their foreign suppliers like what is happening now. Now the Governor is playing with fire…It is a short term solution fumbling in the dark…This is one sick joke! What has happened is while government is getting deserved accolades from their introduction of the SI 64. Industry was benefiting from this and now the Governor is threatening to destroy this..

  13. dai vamirira ma elections

  14. ASIFUNI BUMBULU

    Jha ma 1 aya atanga . It`s a blessing in disguise though. Please print more of the shitty notes then the country goes to it`s knees once again . Come election time muchaziva wat to do not mahumbwe

  15. politics superceding real RBZ business shame on zim economics MR Mangudya and the gvt you lose

  16. How else would ZanuPF pay the goons and louts and terror gangs and petrol for their 400 SUV’s for the 2018 elections?

  17. This guy should have resigned way back cant he see that he has failed, all these notes will end up in the hands of money changers

  18. According to the late physicist, Albert Einstein, insanity is doing the same thing over and over again hoping for a different outcome. That’s how we do things in Zimbabwe. Another example of insanity: pouring water into a bucket with leaks hoping that the bucket will fill up. It may soon fill up (depending on how big the hole is of course), but not permanently obviously, and then you are back to square one sooner rather than later. Printing more bollars – that’s Mangudya and his appointing authorities’s solution to our cash and foreign currency problems.

  19. On this very same day, in one story you report RBZ is “negotiating” for a new facility for Afreximbank, and in the next story that government is going to print another 300 million in bond notes anyway. Seems there is not much real support (real money) behind this new “Zimkwacha”.

  20. We once said it, ‘ Mugabe and your gang of crooks, you can only rig elections and never the economy’, see now what’s happening. The 2008 crisis is back with a bang .

  21. Do the RBZ boss know that we’re buying our own salaries@ 15-20%

  22. Hahaha sokukuubi kakhulu manje l will stay hre in S.A than to come and see mangudya and his cabinet,poor economy nonsense bullshit murders

  23. the only human being who’s worse than Mugabe himself in Zim is this Mangudya guy

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