Zimbabwe finance minister says “bond notes” to stay for now

PUBLISHED: Wed, 17 Jan 2018 15:55:17 GMT

Zimbabwe will not stop using “bond notes”, a domestic quasi-currency, until the economy fully recovers, Finance Minister Patrick Chinamasa said on Wednesday.

The southern African nation in November 2016 started using bond notes in a bid to ease shortages of U.S. dollars, the country’s official currency since 2009.

Since Emmerson Mnangagwa became president last November in the wake of a de facto military coup that removed 93-year-old Robert Mugabe, there has been speculation that bond notes would be scrapped.

“Bond notes will stay until we have our own local currency,” Chinamasa told a business meeting in Harare.

The conditions needed to bring back a local currency include foreign currency reserves of more than three months, a lower budget deficit and higher exports and industrial production, Chinamasa said.

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The bond notes, which are also in short supply, are pegged at par with the U.S. dollar but trade at a discount on the black market. On Wednesday $1 was equivalent to $1.25 in bond notes.

Reporting by MacDonald Dzirutwe; Editing by Ed Stoddard