Eurobond

He said no one will be allowed to separate bank accounts for bond notes and foreign currency, after authorities said the notes will trade at par with the U.S. dollar.

Since 2009, Zimbabwe has been using a basket of multi currencies including the U.S. dollar, British pound, Euro, Chinese yuan and Japanese yen after abandoning its hyperinflation-ravaged currency.

However, the economy has been hit by U.S. dollar shortages, the main currency in circulation, since the beginning of the year.

This led the Reserve Bank of Zimbabwe (RBZ) to plan introduction of bond notes – coming as a five-percent export incentive – to ease the cash shortages.

Introduction of the notes is expected this month after President Robert Mugabe this week decreed regulations paving way for the introduction of the notes that have raised fears of a return to the moribund Zimbabwe dollar.

Mnangagwa was quoted by the state-run Herald newspaper on Wednesday as saying that government was introducing the bond notes to stem pilferage and abuse of the U.S. dollar.

The bond notes will be backed by a 200-million African Export Import Bank facility. Mnangagwa said government had chosen to put bond notes instead of the 200 million dollars on the market to avoid externalization of the hard currency.

He said once in circulation, the government could subsequently compel certain transactions to be done in bond notes so that foreigners who come to do business in the country will be forced to transact through the banks as they cannot carry the bond notes outside the country.

“They have to put the money into the bank and transfer normally so we will now know how much is going out and how much is being kept in. We will be able to know the circulation of money,” the vice president said. Enditem

Source: Xinhua/NewsGhana.com.gh

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