Source: Min: Bond paper to stop US$ looting – NewZimbabwe 25/05/2016
ZIMBABWE will introduce bond notes and restrict the spending of foreign currency to vital commodities to limit dollars leaving the country and exacerbating the nation’s cash crunch, according to Finance Minister Patrick Chinamasa.
“We believe the introduction of the bond notes will help stop the country from being a fishing pond for the U.S. dollar,” Chinamasa said in an interview Wednesday at the African Development Bank’s annual meetings in Zambia’s capital, Lusaka. “A lot of companies, so-called investors, come to fish out our U.S. dollar resources and that is what is producing the shortage.”
Zimbabwe, which abandoned its own currency in 2009 because of hyperinflation, trades mainly in U.S. dollars, while the rand, euro, Botswana pula, yen, yuan and Indian rupee are also legal tender. The central bank limited cash withdrawals from ATMs earlier this month as the country’s ailing economy caused dollar supplies to evaporate, and started a program to explain introduction of bond notes, which will be worth their exact counterparts in U.S. dollars as currency.
The Reserve Bank of Zimbabwe has introduced measures to manage “the foreign currency earnings that we earn as a country and make sure that money is used not to import trinkets but is used to import very vital commodities,” Chinamasa said. “We have produced a priority list which will be used by the bank to guide them on what items they can use foreign currency to import.”
The shortage highlights the struggle President Robert Mugabe’s government faces in resuscitating an economy that is half the size it was 15 years ago, according to government estimates, with about 90 percent of the population out of formal employment. Authorities abandoned an earlier plan to convert half of their export earnings into South African rand and euros and said it will now require 50 percent of those earnings to be transferred to a Reserve Bank of Zimbabwe account.
Zimbabwe’s economic growth forecast for 2016 has been cut to between 1.1 percent and 1.5 percent this year, from 2.7 percent earlier, as the region’s worst drought in decades led to increased expenditure and lower farming output, Chinamasa said. Gross domestic product expanded an estimated 1.1 percent last year, according to the International Monetary Fund.
The Washington-based lender said earlier this month the southern African nation must repay money it owes to the IMF, World Bank and African Development Bank before receiving a new IMF loan. Chinamasa said Zimbabwe can borrow money as long as it is clear about the purpose of the loan.
“We have a policy that any new loans should not go towards consumption, but towards putting up infrastructure,” he said. “We have said that the loan we borrow must create an asset infrastructure that is able to generate cash flows in order to service the loan.”
COMMENTS
On Tuesday July 5th the Bond notes will be available, the RBZ having told all major cash-orientated businesses like supermarkets and petrol stations to bank ALL their US$ by 3pm on Monday 4th July. (This will enable all the Wabenzi and Rangie tribes and other filthy crooks to get there hands on as much US$ as possible so that they can continue to buy their fancy cars and then set themselves up as forex dealers.) When these places open for business the next morning, the US$ will no longer be in evidence – you will receive Bond Notes as change. By 3pm on the Tuesday July 5th the Bond Note will have halved in value. By Thursday it will have an exchange rate of 4 Notes to 1 US$, and the US$200 million upholding the Bond Note will be exhausted. By Saturday there will be chaos in Zimbabwe, by Monday 12th July it will all be over. Goodbye RGM and ZanuPF.
The mind boggles that these inept leaders have managed to fraudulently hang onto power for so long. Surely the Zimbabwean people are a peace loving people. Any other people would have done something about this by now.
Zimbabwe is an exclusive fish pond for the “Zanu Elite” who are known to Super Crooks. They want to get the US$ from the people in exchange for their Bond Toilet paper. This will occur as planned to suck the US$ out of the people for fraudulent Toilet paper.
Hokoyo Comrades – get your US dollars out of any bank you might have your savings in, in Zimbabwe.
You are going to be given a valueless piece of paper ( ZIm dollar no 6 as in 6th issue of the Zim dollar)
‘our us dollar resources’ Not so long ago it was ‘filthy imperialistic usd!’ How times have changed.
This is very insane. Get the people who looted and externalised the money. Get those people tried and sent CES if found guilty. All Zimbabweans need the luxury of holding worthwhile cash and interact with the whole world financially. These bonds are limiting and drag the country even further back. In 2008 I had American dollars stollen from the bank because there was no foreign currency. All people with foreign currency in Zip banks beware.
“A lot of companies, so-called investors, come to fish out our U.S. dollar resources and that is what is producing the shortage.” The biggest fisherman has been this kleptomaniac Zanu PF government that, faced with an ever shrinking tax base after its assault on our economy, has continued to find new ‘nets’ (like TBs) to fish out and squander our hard earned dollars. I think we are headed for a perfect storm in the next 6-12 months. This “million man” spectacle brings back to memory the events after Ceaușescu’s final speech before a rented, palace crowd of tens of thousands. Hopefully there will be no ill-advised GNU to rescue our oppressors this time.
Grace.
Robert?
Three down…”Trust in Me”.
Kaa, The Jungle Book.
007? Four across.
Bond.
Don’t loot US dollars. The “govern”ment hates competition.
bond PAPER notes. What currency letter? Not $, £, € or ¥ obviously. Maybe B(ona)?
I
We use forex to import goods now with introduction of bond notes the black market will shoot up and as a result the bond will loose value
If Minister Chinamasa is serious and sincere in saying the USD is being fished out of Zimbabwe why did the govt of Zimbabwe find it fit and proper to recently fish out $40 million to VimpelCom, in the Netherlands with respect to unlisted Telecel Zimbabwe shares? Instead of externalising or fishing out $40m for this purpose why didn’t the govt import maize, raw materials or medicines? So the so called investors are fishing out the USD? In which case why is Zimbabwe wooing new foreign investors when they are kicking out existing investors like VimpelCom? Why is Chinamasa NOT telling us that by printing bond notes Treasury will generate revenue to finance govt expenditures thru seignorage? This is the main reason for printing bond notes. The other reason is to allocate or ration forex and monopolise its use by the govt at the expense of the private sector and individuals. Govt will take the biggest share of forex earned and starve the private sector and individuals in its allocation of this scarce commodity. To buy USD on the parallel market one would have to buy it at 10 times as much in no time. Clearly bond notes will not solve cash shortage but will in fact increase capital flight and create inflationary conditions in Zimbabwe. Bond Notes will take us to 2008 era and in no time shops will be empty and there will be food riots in Zimbabwe. This govt never learns from its past mistakes. The writing is on the wall!