HARARE - The new regime of special coins indexed at par with the United States coins that will be installed by December will be bankrolled by a $50 million bond facility, the Central Bank governor has said.
The special coins are meant to ease change shortages.
The coins, which are being imported, will be introduced as a medium of exchange and are aimed at augmenting currencies in circulation.
The measure, announced in the Central Bank’s monetary policy statement released two weeks ago, comes as Zimbabwe is battling a liquidity crisis and small change challenges.
The government in 2009 abandoned use of the Zimbabwe dollar and adopted a basket of foreign currencies after the local currency was devastated by hyperinflation that topped 500 billion percent.
RBZ governor John Mangudya said during a meeting last Thursday organised by the Southern African Parliamentary Support Trust that the government had looked into importing US coins in the past, but did not follow through on the plan because freight charges were higher than their value.
The Bank has chose instead to import “special coins” with similar denominations and values.
“We had to arrange a $50 million bond facility which is a United States dollar bond for coins,” Mangudya said.
He said the coin shortage has made the pricing of products difficult, as goods have had to be rounded off to the nearest dollar.
In an interview with the Daily News last week, Mangudya said they were expecting to introduce the special coins before the end of December 2014.
“Indeed, they would be convertible just like the notes,” Mangudya said.
He said “it stood to reason that we need the special coins to be the divisibility units of the USD notes, as such, the special coins would need to be at par with the US cents.”
“Divisibility is one of the most important characteristic of money. The rand coins are also being imported to augment the available stocks within the economy,” said the central bank boss said.
He was tight-lipped on the features of the coins, source and name.
“I cannot tell you the source of the coins,” he said.
“I need to protect the integrity of this market. The RBZ will only share the information on cost once we receive the final invoice from the suppliers, whom we expect to meet next month.”
RBZ has been in negotiations with banks and the Bankers Association of Zimbabwe on the details of importing the coins and whether to sell them. Mangudya said that the coins would be distributed through normal banking channels from the Reserve Bank and that its Bank Use Promotion Unit would monitor them. At the announcement, Mangudya did not give the terms of the bond or where the coins would be imported from.