Zimbabwean currency: funny money
Does the $200m facility designed to prop up Zimbabwe’s bond notes exist? Without it, bond notes — which citizens believe mark the return of the devalued Zimbabwean dollar — have no value
When the Reserve Bank of Zimbabwe (RBZ) in May last year announced plans to launch bond notes with a value on par with the US dollar, the news made headlines. It had never been done elsewhere. It also aroused suspicion. Lingering fears of the return of the devalued Zimbabwe dollar had been dismissed by the central bank on many occasions after it adopted the US dollar. But a liquidity crisis has affected the recovery initiated by the dollarisation of the economy. Zimbabwe abandoned its currency in 2009 after hyperinflation destroyed its value. In 2014, RBZ chief John Mangudya introduced bond coins to Zimbabwe, backed by a US$50m African Export-Import Bank (Afreximbank) facility. The coins were grudgingly accepted as a means of trade. But biting shortages of US dollars have created the need for an alternative to the coins, and Mangudya believes bond notes could address the problem. The value of the new currency would be derived from a $200m Afreximbank bond facility, Mangudya said in ...
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