Zimbabwe central bank secures $500 million to ease dollar shortages

Finance Minister Mthuli Ncube tweeted that the loan had been secured from international banks
zimbabwe money
Zimbabwe Reserve Bank Governor John Mangudya delivers his Monetory Policy Statement in Harare on February 20, 2019, where he announced the establishment of an interbank foreign exchange market in the country officially abandoning the 1:1 exchange rate between the USD and the country’s quasi currency the Bond note. (Photo by Jekesai NJIKIZANA / AFP)

Zimbabwe’s central bank has secured a $500 million loan from unspecified international banks to support interbank currency trading from Monday and ease a dollar crunch that has brought fuel and medicine shortages, Governor John Mangudya said.

The central bank introduced a new local currency in February, the RTGS dollar, and launched an interbank trading platform where businesses and individuals could buy and sell U.S. dollars.

But dollars have been scarce on the official market, where a U.S. dollar fetches 3.4 RTGS dollars compared to 6.3 RTGS dollars on the black market.

The mismatch has seen companies and individuals with dollars selling their money on the black market where premiums are higher, amid charges that the central bank was manipulating the official exchange rate.

Your Friends Also Read:  Africa’s TDB Signs $30m Trade Finance Agreement with UAE's ADEX

Mangudya said in a statement that the central bank would start accessing the $500 million from Monday “to meet the forex payment requirements of business and individuals”.

“This amount shall go a long way to stabilise the exchange rates and prices of goods and services in the economy,” said Mangudya, without revealing the source of the loan.

Finance Minister Mthuli Ncube tweeted that the loan had been secured from international banks, which he did not name.

In the past week, the new currency lost 26% of its value on the black market but is only 3.6% weaker on the official market.

Your Friends Also Read:  Akinwumi Adesina Sworn In For Second Term As AfDB President

The weakening currency has fuelled inflation, which raced to a new 10-year high of 75.6% in April.

Zimbabwe has not received funding from international lenders such as the IMF and World Bank since it defaulted on its loan repayments in 1999, and a dollar crunch has worsened this year, leading to shortages of fuel and medicines.

The country has largely relied on the African Export and Import Bank (Afrexim Bank) for foreign loans by mortgaging future gold export earnings.

Mangudya said in March the central bank last year borrowed $985 million from Afrexim Bank and other African lenders to purchase fuel and other critical imports.


All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from News Central TV.

Contact: digital@newscentral.ng

Total
0
Shares
Previous Article
TS Galaxy wins 2019 Nedbank FA Cup

TS Galaxy crowned 2019 South Africa’s Nedbank FA Cup champions

Next Article
burkina faso

Christians seek refuge after deadly attacks in Burkina Faso

Related Posts

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.