MNANGAGWA: USD is being abused in Zim

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VP Emmerson Mnangagwa says the United States dollar is being abused in Zimbabwe, hence the need for bond notes.

“The US dollar is a reserve currency. It is a precious currency to most countries in the world. It’s for international transactions. Haisi yekutengesa matohwe, yekutengesa mavisi, yekutengesa madora kana yekutengesa mazhanje. That is only found in Zimbabwe.

It’s a unique country, which is abusing the US dollar. We said we must use the US dollar for the purpose we designed it.

“We needed to find a mode of transaction that is domestic because if you put $200 million into Zimbabwe today, after a few days, it’s all taken out. It is not even going through the banking system. Some even smuggle it through tyres.”

VP Mnangagwa said Government then discussed with Afrexim Bank for a $200 million financial cover for the bond notes.

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He said in the quest to curb capital flight, Government introduced bond notes to ensure that they were only used in Zimbabwe. “But we peg it to the US dollar so that we don’t have one account for the bond notes and another account for US dollars. It is the same account. We first tested the waters with bond coins. Initially, they were resisted but now they are on demand.

“Down the line, it’s possible that we might even say certain transactions or certain payments in the system shall be done with bond notes so that if some people come from outside and sell on the Zimbabwean market, they are now forced to go to the bank because they cannot carry the bond notes outside.

“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. We will know of the volumes of the circulation of money. This is a mode of transaction to facilitate liquidity within the country and have a limitation on the exportation of the currency,” said VP Mnangagwa.

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