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.
