RESERVE Bank of Zimbabwe (RBZ) governor, John Mangudya yesterday told Parliament the central bank had no authority to introduce the South African rand, as the country’s official currency or change from the multi-currency system.
Source: Mangudya grilled over bond notes, SA rands – NewsDay Zimbabwe June 14, 2016
by VENERANDA LANGA/TARISAI MANDIZHA
Mangudya said this when he appeared before the Finance and Economic Development Portfolio Committee, where MPs grilled him about the introduction of bond notes and other financial matters.
“The governor has no authority to change from the multi-currency system that we are using to the rand because it takes a long time and such an announcement also shocks the market. So, for now, let us deal with the multi-currency system because it is a flexible system,” he said.
Treasury and the RBZ last week ordered line ministries and parastatals to embrace the multi-currency system for various transactions in light of the current cash shortages.
“What it means is that every institution must be able to accept the rand, euro and other currencies as a form of payment. Government is the biggest customer in this economy, with almost 60% of transactions and there is no reason why they should not accept the rand,” Mangudya said.
He said he would soon announce a new schedule of bank charges after depositors complained of high charges demanded by banks.
“The $200 million incentive will support exports worth $6 billion and it will not be disbursed all at once, but it will be on a gradual basis. Come October, when they are issued, you will not even see the bond notes – maybe you will begin to see them next year because these bond notes will be so scarce because they are meant to incentivise exporters and half of this year it will be $1,8m from the $200m brought into the market.”
COMMENTS
“The $200 million incentive will support exports worth $6 billion”….. What is he smoking?
the guy is smoking some mugabe-weed..
Here are the new mugabonds, I will take your dollars now, thank You.
Cheat me once, shame on Matibili, cheat me twice, shame on me.
I concur with Dr Mangudya…..there is no way we can adopt the rand and despite that the rand is far from adressing our problems….i dont think we are able to cope with the movements around it,its position as of now which is projected to likely worsen ……what we need as of now is a stable currency system in which people has confidence in,the greenback had been ideal for that but unfortunately we are at a point where we need to look at other measures like Mr Manngudya has apprehended ,adopting other currencies within the basket for transactions……..however with that in mind wouldnt this cause friction in the economy with regard to issues to do with the exchange rates of the diff currencies?
IF RBZ GIVES $200MILLION ZIMBABWE BOND NOTES (ZBN) FOR EVERY $6BILLION WORTH OF EXPORTS, THE EXPORTERS BOND EXCHANGE RATE AGAINST USD WILL BE US$1=ZBN30 ie one ZIM bond note will be worth US$0.0333. Why is RBZ calling 3 cents a BOND NOTE?
THE ZIMBABWEAN PUBLIC BEGAN REJECTING THE RAND WHEN USD/RAND EXCHANGE RATE STARTED FALLING PRECIPITOUSLY. WHAT MEASURES CAN GOVERNMENT TAKE THAT WOULD MAKE THE PUBLIC ACCEPT ZBN WORTH 3CENTS AS EQUIVALENT TO U$1? I recommend that government treasury and tax authorities lead by example and accept bond notes as the primary currency for payment for government services – fines for traffic offences, property taxes, and payment of taxes – vat, corporate taxes, income taxes – using the 1:1 exchange rate against the USD. Initially government would lose 97c out of every dollar of taxes paid in bond notes – enough incentive for government to defend and enforce domestic exchange rate parity between ZBN and US$. The governor of RBZ must be prepared to use monetary policy and bank regulatory powers to enforce parity – even when initially the public would be trading one bond note for its apparent exchange value of US$0.03 inferred by RBZ incentive scheme for exporters who shall be paid ZBN30 for every US$1 earned from exports!