Scrap forced parity of US dollar-bond notes: ZNCC

HARARE - The Zimbabwe national Chamber of Commerce (ZNCC) has asked Finance minister Mthuli Ncube to stop in the National Budget the use of bond notes and RTGS electronic balances, officially at par with the US dollar.

In the parallel market, bond notes are trading at a discount vis-à-vis the US dollar, and electronic balances are also exchanging at a discount.

Combined with the trade controls, the discounts have led to an uptick in inflation, which has raced to its highest in October since 2008 following a surge in prices of cooking oil, flour and sugar, the statistical agency Zimstat said, as the country faces a worsening dollar shortage.

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Christopher Mugaga, an economist and chief executive of the ZNCC, said the currency conundrum is a reality as we move towards 2019.

“Zimbabwe’s bond note and RTGS 1:1 pegging against the US dollar is no longer sustainable.  This is a confirmation that we are no longer dollarised as we were. What is now coming up is a local currency economy and we don’t expect a budget below $10 billion,” he said.

President Emmerson Mnangagwa has reportedly stopped Ncube from scrapping the quasi currency bond note and liberalise exchange controls, but enacted tough new measures prescribing 10-year jail terms for money changers.

Comments (6)

They get it wrong every time, don't they. Its us that suffer, not the fatcats or the wabenzies.

Is that so? - 19 November 2018

Scrapping Bond notes and TRGS is not the best ideas, our economy will come strong in terms of currency where cost of production increases,production decreases, goods and services demand decreases that lead to stagnation and deflation resulting negative economy growth rate with higher import and less export. with inflation at 20 now it encourage economy activities but stabilize short and medium terms. The supply of Bond notes must alway kept a quarter USD on our system that can easily absorbed in RBZ. The Bond notes is promoting economy activities at grass root and upper level.The bond can be easily appreciate its value only by buy in from those need forex for imports.As long as the bond still value more than Rand is worthy using it .RTGS is the one stabilizing our economy to have to produce its Maize through Command Agriculture so it must be shift to long term to lessen pressure on short term economy recovery and too much money on our economy.The bond notes is test the for coming currency so its very very important if one day we need to have our own currency but first the bond notes must passed the test, one, to be stable, two, store of value, three, acceptable, four ,exchangeable and keep on its parity. So ZNCC think on economy advantages for both buyer and seller,consumer and producer to promote economy growth with stable rate.

Hope - 19 November 2018

@Hope.....Learn to write English first and you will quickly learn to understand economics a little better

Doug SA - 20 November 2018

Everything built on lies at the end of the day is always going to be fake and ends in disaster sooner or later. The government has chosen to build an economy by spreading fake news that the US & Bond note are equal. Its a lie and now we are paying the price for it. Our government chose to steal money from citizens by printing more money basing on this lie. The consequences of such lies are what we are experiencing now. The truth and only the truth will set us free. Lets stop this stupid lie of 1:1.

The Beautiful ones are not yet born - 20 November 2018

@ Hope.... Bond note and RTGS is all just fake stuff. Its helping no-one and its steals wealth from hardworking citizens.

The Beautiful ones are not yet born - 20 November 2018

ZNCC is right! Let's admit it - the $US and the Bond can be at par at the Rukisheni or Ruzevha level, but when it comes to the heart of the economy, the reality dictates otherwise!

Mhofu Chaiyo - 20 November 2018

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