News / National
CZI calls RBZ to release bond coins not notes
15 Sep 2017 at 06:43hrs | Views
INDUSTRY lobby group, the Confederation of Zimbabwe Industries (CZI) has called on the Reserve Bank to release the additional $300 million, not in notes but in coins as a way of countering the black market.
Last year, the Reserve Bank of Zimbabwe introduced $200 million bond notes guaranteed by AfreximBank to promote exports growth through a five percent incentive scheme to exporters.
However, owing to the prevailing cash crisis, there has been an emergence of a three tier pricing system with one for the greenback with others for the bond notes and plastic money which has resulted in a scramble for bond notes.
Despite RBZ announcing that exchange rate for bond notes and coins was at par with the United States dollar, illegal foreign currency dealers across the country were devaluing the surrogate currency.
In his 2017 mid-term monetary policy statement, the Central Bank Governor Dr John Mangudya extended the bond notes export incentive scheme by $300 million under a standby liquidity support from AfreximBank.
During a round table in Gweru yesterday, CZI president Mr Sifelani Jabangwe said injecting bond notes into the market would further fuel the black market which was holding onto bond notes for speculative and illicit deals.
"Our challenge is that with the bond notes introduction they are likely to go and join the other ones outside the market.
"We have seen that the bond notes are now being used as a medium of exchange," he said while addressing the business community during the roundtable.
With the devaluation that has happened Mr Jabangwe said business has seen the black market using bond notes adding that if there was a release of more notes the currency would further parallel market.
"So if there is any cash release, it should be in the form of coins. One does not need a lot of cash to transact and the cash is being used for illicit transactions. In other words, it's being used to pay for goods that have been imported which are in competition with what we are all producing," he said.
The export incentive scheme was introduced in May 2016 as a way of stimulating exports which saw the injection of bond notes in November.
Hoarding of bond notes attracts jail term of up to seven years following the signing into law of the RBZ amendment Act (No. 1 of 2017) which regularised the circulation of bond notes.
Last year, the Reserve Bank of Zimbabwe introduced $200 million bond notes guaranteed by AfreximBank to promote exports growth through a five percent incentive scheme to exporters.
However, owing to the prevailing cash crisis, there has been an emergence of a three tier pricing system with one for the greenback with others for the bond notes and plastic money which has resulted in a scramble for bond notes.
Despite RBZ announcing that exchange rate for bond notes and coins was at par with the United States dollar, illegal foreign currency dealers across the country were devaluing the surrogate currency.
In his 2017 mid-term monetary policy statement, the Central Bank Governor Dr John Mangudya extended the bond notes export incentive scheme by $300 million under a standby liquidity support from AfreximBank.
During a round table in Gweru yesterday, CZI president Mr Sifelani Jabangwe said injecting bond notes into the market would further fuel the black market which was holding onto bond notes for speculative and illicit deals.
"We have seen that the bond notes are now being used as a medium of exchange," he said while addressing the business community during the roundtable.
With the devaluation that has happened Mr Jabangwe said business has seen the black market using bond notes adding that if there was a release of more notes the currency would further parallel market.
"So if there is any cash release, it should be in the form of coins. One does not need a lot of cash to transact and the cash is being used for illicit transactions. In other words, it's being used to pay for goods that have been imported which are in competition with what we are all producing," he said.
The export incentive scheme was introduced in May 2016 as a way of stimulating exports which saw the injection of bond notes in November.
Hoarding of bond notes attracts jail term of up to seven years following the signing into law of the RBZ amendment Act (No. 1 of 2017) which regularised the circulation of bond notes.
Source - chronicle
