Gold Exporters Fuelling Currency Crisis

HARARE – The Reserve Bank of Zimbabwe (RBZ) says gold and tobacco exporters are behind the emergence of wades of new bond notes on the parallel market.

Huge quantities of bond notes have been seen on the parallel market in Zimbabwe, where rates hit the roof two weeks ago, sparking a flurry of reactions from authorities.

A report released by the Chartered Institute of Secretaries and Administrators in Zimbabwe (CIS) quoted Jesimen Chipika, the deputy governor of RBZ, blaming exporters for stashing bond notes on the black market.

“New bond notes found on the parallel market largely come from exporters of gold, tobacco and cotton, who are partly paid in cash for the foreign currency they surrender to the reserve bank,” CIS courted the RBZ’s deputy chief as saying.

CIS said Chipika had been asked where the new bond notes found on the parallel market came from, when banks did not even have old ones.

“She said the basic problem when it came to the worsening foreign exchange rate was one of supply and demand,” said CIS. 

The reported quoted her as saying; “The supply of foreign currency was insufficient to meet the demand for it. We need higher productivity in all sectors. We need more exports”.

Zimbabwe lacked the financial support that other countries had from international financial institutions, Chipika was quoted noting.

The International Monetary Fund, the World Bank and other key global financial banks have in the past two decades shut the country out of funding windows.

“Responding to another question on the shortage of cash, Chipika said the fact that more than 90 percent of transactions were electronic was a good development, even though it had come about largely as a result of a cash shortages following the “dollarisation” of the economy,” said CIS.

It said Chipika had noted that the central bank intended to provide banks with more cash.

However, it would do so only gradually, and in exchange for RTGS balances in the banks to minimise inflationary effects.

“Although cash was still needed for some small transactions, some of those queuing at banks for cash were not doing so because of real need but for speculative purposes,” the report quoted the RBZ chief as saying.

Zimbabwe National Chamber of Commerce chief executive Christopher Mugaga said events on the ground were overtaking what was in the Transitional Stabilisation Programme.

“Former Masipe Consultants governance consultant Peter Madara said it was a tragedy that Zimbabwe was exporting some of the best brains it had to the diaspora. He thought that the country did not gain half as much in remittances from the diaspora as it would gain if those people were working in Zimbabwe,” said CIS.

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