Zimbabwe

Tsvangirai's MDC threatens demonstration against bond notes

2016-05-10 12:52
Morgan Tsvangirai (AFP)

Morgan Tsvangirai (AFP)

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Harare - Zimbabwe's main opposition party, the Movement for Democratic Change (MDC), has threatened a massive demonstration over government's plan to introduce bond notes, reports NewsDay.

Leader Morgan Tsvangirai called his party's shadow cabinet on Tuesday to an emergency meeting as he threatened to mobilise for mass demonstrations to stop the move.

Zimbabwe adopted a multiple currency regime in 2009 after its own currency tumbled owing to hyper-inflation that peaked at 231 million percent, rendering the national currency worthless.

After an escalating shortage of foreign bank notes last week, central bank governor John Mangudya unveiled measures, including limiting withdrawals to $1 000 per day and printing a series of tokens, called bond notes, rated on par with the US dollar.

According to Mangudya, the bond notes would be backed by a $200m support facility provided by the Afrexibank (Africa Export-Import Bank).

He was quoted as saying that the move was aimed at prevednting locals from taking the already scarce bank notes, such as the US dollar, out of the country, thereby creating money circulation problems.

Meanwhile, Bulawayo South MDC-T lawmaker Eddie Cross said that the cash crunch that the country was going through was Finance Minister Patrick Chinamasa’s fault as he had been overspending in recent years.

Cross said the country’s treasury had been robbing the banks by spending money that it did not have.

He wrote on his website: "I believe that the only credible explanation of the sudden cash shortage is that when Chinamasa cannot balance his books at the month end and needs cash, he has been dipping into the RTGS [money transfers through the banks] account at the Reserve Bank – replacing the funds with a simple IOU[Treasury Bills]…," Cross wrote.

Tsvangirai described the move as madness, adding that his party reserved the right to demonstrate against such a move.

"The MDC-T is preparing a robust political response to this madness and the party reserves its right to mobilise the people against this ill-advised decision that is certainly not backed by economic logic. Zimbabweans have fresh memories of the traumatising experiences with the 'bearer’s cheques' of 2008," Tsvangirai was quoted as saying.

Read more on:    mdc-t  |  eddie cross  |  john mangudya  |  morgan ­tsvangirai  |  zimbabwe  |  southern africa

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