…says bond notes will start circulating end of October
The Reserve Bank Governor, Dr John Mangudya has assured the nation that bond notes will come as a relief since they will serve as a counter to corruption and money laundering.
Dr Mangudya made the remarks while presenting the Mid Term Monetary Policy Statement where he said contrary to skepticism surrounding the proposed introduction of bond notes among the general public, the money will come to restore confidence in the banking sector and will help curb corruption and money laundering.
“The bank has heard and taken note of the public’s concerns, fear, anxiety and skepticism of bond notes which boils down to the general lack of trust and confidence within the economy.
The bank is addressing the concerns by planning to introduce smaller denominations of bond notes of $2 and $5. This will go a long way in trying to curb issues of money laundering and externalization of funds. This will also mean we will have enough money in circulation as these notes will only be operational inside the borders of Zimbabwe,” said Dr Mangudya.
He added that the central bank proposed for the setting up of an independent board to have an oversight role on the issuance of the short term measures meant to mitigate the ongoing liquidity crunch.
The Central Bank boss further said “the issuance of bond notes has a self-control mechanism in that when there are no exports there will be no bond notes. The bond notes will be gradually released into the economy in sympathy with export receipts through normal banking channels up to a maximum ceiling of the facility of $200 million
“The ceiling would be attained when total exports are around $6 billion,” said the central bank governor while adding that at the rate at which the country is exporting, the anticipation is that bond notes equivalent to around $75 million will be in circulation by year end.
The bond notes, which will start to circulate by end of October 2016, will be at par with the US$ and will be used in the same manner as bond coins.
Meanwhile, Dr Mangudya revealed policy measures that the RBZ has adopted to enhance confidence and production.
Chief among them is the ease of securing offshore loans where, with immediate effect, the threshold of external loans that do not need prior exchange control, have been increased to $20 million from the current stipulated $10 million, for both private and public sectors.
In addition, the RBZ has put in place a $20 million gold development initiative facility to support small scale and artisanal miners.
“The central bank secured the $20 million for Fidelity Printers and Refiners to support small scale and artisanal mining operations in order to increase gold production in the country.
“With underground gold reserves estimated to be around 13 tons, Zimbabwe’s rich gold reserves are clearly under-exploited. Only 586 tons have been mined since 1980 to August 2016.
“There is therefore , great scope to vigorously promote the mining of gold across the country in order to liquefy the econoy,” Mangudya said.
