Budget: Government sticks to its guns on multi-currency

0
311
The RBZ absorbed loans of multi million dollar companies like Cottco, Bitumen, Rio Zim, Hwange and even a private college. The companies, who had failed to pay back the banks, have failed to pay back the RBZ, and now the central bank has been forced to start looking for investors to save the companies from sinking, together with the RBZs money

By Tinomutenda Midzi

The government has remained adamant that the surrogate currency of bond note will remain at a value of 1 to 1 with the United States dollar  despite the run-away parallel market rate.

In his national budget proposal presentation on Thursday in the capital, Finance minister Mthuli Ncube said:

“Government commits to preserving the value of money balances on the  the current exchange rate of 1 to 1, in order to protect people’s savings and balance sheets.”   

Multi-currency system has been pointed out by economists as the causative factor in the  high exchange rates in the parallel market after the central bank introduced a surrogate currency the  bond notes late 2016, which it claimed was backed by a US$200 million Afreximbank facility, to stabilise the cash crisis that in 2015.

When bond notes and coins were introduced the government said they were at par with United States of America’s dollar.

In September this year, inflation rose to shocking levels in the black market, the only place where US dollars are easily obtained, with 600 bond notes buying just US$100.

Economic analysts said this move was to avoid paying civil servants’ salaries in United States dollars.

The RBZ absorbed loans of multi million dollar companies like Cottco, Bitumen, Rio Zim, Hwange and even a private college. The companies, who had failed to pay back the banks, have failed to pay back the RBZ, and now the central bank has been forced to start looking for investors to save the companies from sinking, together with the RBZs money