New 'bond notes' facility on the cards - Mangudya

New 'bond notes' facility on the cards - Mangudya
Published: 16 July 2017 (1046 Views)
THE Reserve Bank of Zimbabwe is on the verge of securing $500 million from international lending institutions which will cover for the country's immediate needs during the foreign currency dry season when the tobacco season comes to an end.

In addition, the Apex Bank is also negotiating with lenders for additional funds to boost exports through the continued provision of export incentives facility through bond notes, RBZ Governor Dr John Mangudya said last night.

In interview, Dr Mangudya said the first priority was to secure money to cover critical needs once the tobacco seasons has ended.

Tobacco is a major foreign currency earner for the country but the selling season is coming to an end.

Last year the country earned nearly $1 billion from tobacco exports.

"On this one ($500 million), we are almost close, we have agreed the terms and conditions and this is the money that we will use to cover essentials such as fuel and electricity when the tobacco selling season comes to an end," he said.

On the cash shortages, Dr Mangudya said people must understand that bond notes were never introduced to solve the cash shortages but as an export incentive.

"At the moment we have $175 million worth of bond notes and this must be seen in the context of being the value of the export incentives that we have given so far. Going forward we are also looking at securing another fund to ring fence the incentive and this must not be mistaken as to say we are just increasing bond notes in the market. We will be increasing the export incentive facility to boost our exports and increase generation of foreign currency. The bond notes have become a downstream benefit and I can understand when this benefit is now being taken as a solution to our cash problems," he said.

The negotiations, said Dr Mangudya, were still in infancy hence he could not divulge how much or which lenders the bank was negotiating with.

The $200 million facility which is being used to support the export incentive was secured from the Africa Export Import Bank (Afrexim Bank).

"We need to push exports and that is the only solution to our problem. We introduced the export incentive so that our goods can become competitive and so that we can also manage to get the foreign currency," he said.

Dr Mangudya said at the moment exports were lower than imports resulting in expenditure being more than the income.

"At the end Government is forced to borrow from the local market and this increases money supply - money which, however, is not backed by foreign currency. When the civil servants and other workers are paid they want to access their money in notes. They want to access money which is not there," he said.

Dr Mangudya said the solution then lies in pushing exports and promote more remittances from Zimbabweans living outside the country.

He added that some retailers were also to blame as they were not banking their proceeds and also not accepting the plastic money.

"Apart from $175 million in bond notes and coins we also have $600 million in other currencies but it is because of the indiscipline of some traders who are refusing to bank and adopt plastic money and this is causing cash problems. These retailers are refusing to bank because they want to externalise the money, they are corrupt and this rent seeking behaviour must stop. Instead of selling goods they are now selling money, money is no longer used as a store of value or commodity of exchange but is now a commodity which is now being sold. We need to change this," said Dr Mangudya. He reiterated that people must embrace plastic money.

- Sunday News

Tags: Bondnote, Mangudya, RBZ,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

'Learn to appreciate good deeds,' Adv. Mahere told

by Simbarashe Sithole | 21 February 2018 | 140 Views

Pastor fails to pay maintenance

by Staff reporter | 21 February 2018 | 112 Views

Hooker stabs client to death

by Staff reporter | 21 February 2018 | 119 Views

Elizabeth Tsvangirai story: A true mirror of human rights encroachments faced by widows in Zimbabwe

by Patience Sibanda (intern at Zimbabwe Democracy Institute) | 21 February 2018 | 186 Views

'Chamisa now unstoppable'

by Staff reporter | 21 February 2018 | 181 Views

Tshinga Dube wades into 'foreign' labour saga

by Staff reporter | 21 February 2018 | 129 Views

Mnangagwa's govt fails to pay bonuses

by Staff reporter | 21 February 2018 | 74 Views

Zanu-PF MP's son shot

by Staff reporter | 21 February 2018 | 92 Views

Chamisa bemoans violence against party leaders

by Stephen Jakes | 21 February 2018 | 135 Views

Mnangagwa commissions NRZ rolling stock

by Staff reporter | 21 February 2018 | 77 Views

Ban on kombis in CBD slammed

by Staff reporter | 21 February 2018 | 224 Views

Mahamat of supporting a coup government in Zimbabwe

by Staff reporter | 21 February 2018 | 85 Views

President Mugabe's 94th birthday photos

by Staff Reporter | 21 February 2018 | 879 Views

Mugabe feeling 'unloved' on his 94th birthday

by BBC - Brian Hungwe | 21 February 2018 | 134 Views

What peace and reconciliation without truth

by S.V Mabhena | 21 February 2018 | 65 Views

MDC-T splits as Obert Gutu quits MDC-Chamisa

by Staff reporter | 21 February 2018 | 157 Views

US to withdraw MDC-T funding over terror attacks on Khupe?

by Staff reporter | 21 February 2018 | 137 Views

Turning blind eye on violence, root cause of MDC split - Coltart

by Simbarashe Mwandipendaa | 21 February 2018 | 76 Views

PICTURES: Bhalagwe memorial service

by Staff reporter | 21 February 2018 | 68 Views

The Menzisi Dube Foundation Appeal

by Agencies | 21 February 2018 | 48 Views

Billy Graham dies

by BBC | 21 February 2018 | 94 Views

Happy national youth day comrades

by NPP National Youth | 21 February 2018 | 103 Views

Happy Birthday Baba Bona

by Belinda Chowa | 21 February 2018 | 229 Views

WATCH: The moment Khupe was attacked by Chamisa's supporters

by Staff reporter | 21 February 2018 | 131 Views

Zhuwao 'reacts angrily' as AU supports Mnangagwa' - report

by Staff reporter | 21 February 2018 | 86 Views

WATCH: Chamisa supporters called Khupe a dissident

by Staff reporter | 21 February 2018 | 139 Views

Chamisa apologise but tells Khupe to go to Mars

by Staff reporter | 21 February 2018 | 150 Views

The politics of gender and tribe must fall - NPP Youths

by Khulani David Ndlovu | 21 February 2018 | 72 Views

Econet Media's Kwesé and iflix Deepen Partnership

by APO | 21 February 2018 | 89 Views

Khupe attackers were chanting Chamisa slogans

by Simbarashe Sithole | 21 February 2018 | 88 Views

Mujuru in Buhera

by Advocate Gift Nyandoro | 21 February 2018 | 83 Views

Attack on Khupe a Gukurahundist replica

by Mkhululi Zulu | 21 February 2018 | 96 Views

Thank You Zimbabwe - MDC-T

by Luke Tamborinyoka | 21 February 2018 | 177 Views

No lavish 94th birthday celebrations for Mugabe

by Staff reporter | 21 February 2018 | 211 Views

Mnangagwa's emissary humiliated at Tsvangirai burial

by Staff reporetr | 21 February 2018 | 132 Views

Mutambara whip up MDC-T crowd with partisan speech

by Staff reporter | 21 February 2018 | 129 Views

Chamisa invaded Tsvangirai's most private space

by Staff reporter | 21 February 2018 | 159 Views

Kaseke, ministry official clash over Mzembi

by Staff reporter | 21 February 2018 | 89 Views