Zimbabwe

Zim turns to SA after Germany refuses to print bond notes - report

2016-10-22 18:02
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Zimbabwe 'has the strongest currency in Africa': state media
Zimbabwe 'has the strongest currency in Africa': state media

"This is a fact: Zimbabwe has the strongest currency in Africa". Sounds unbelievable - but that's what the official Herald newspaper claimed hours after President Robert Mugabe's SONA.

Cape Town – A Germany company, Giesecke and Dverient has reportedly rejected a request by Zimbabwe to print bond notes for the country's cash-strapped treasury.

According to Zimbabwe Independent, the southern African country had since turned to South Africa and other countries for help.

Zimbabwe’s Reserve Bank governor John Kangudya recently announced that the bond notes were expected to be in circulation by the end of October.

Mangudya said that by the end of December, at least $75m worth of bond notes would be in circulation.

The report, however, quoted sources as saying that the German firm, which had previously helped Zimbabwe print money, was reluctant to print the bond notes as confusion surrounding the introduction of the surrogate currency continued.   

"According to information that we have from the said company, it will not print bond notes for the government of Zimbabwe. Other than that, I cannot say more," an official from the Germany embassy was quoted as saying. 

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Meanwhile, News Day reported on Saturday that Finance Minister Patrick Chinamasa had indicated that the bond notes were unlikely to hit the market anytime soon, as government was yet to finalise modalities for the introduction of the currency. 

"The parameters within which the bond notes shall be introduced and implemented are still at conceptualisation stage and nothing is as yet, cast in stone in this regard," Chinamasa was quoted as saying. 

The southern African country adopted the US dollar and South African rand in 2009 after inflation, which peaked at 231 million%. But the country has since run out of the US dollar notes in recent months, and hopes to ease the cash crunch by printing its own "bond notes" will be valued in denominations of $2, $5, $10 and $20. 

The bond notes would reportedly be equivalent to the US dollar and would be backed by a $200m facility provided by the Afreximbank bank. 

Read more on:    germany  |  zimbabwe  |  sa  |  southern africa

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