Govt should adopt bond notes as the official local currency, and not as a surrogate says Prof. Chakravarti

 

University of Zimbabwe economics professor and government’s top advisor on Ease of Doing Business reforms, Professor Ashok Chakravarti, has urged the government to officially use the bond note as the local currency instead of pegging it at 1:1 with the United States Dollar.

Speaking at a SAPES discussion titled Zimbabwe’s Economy: How and When to Reintroduce a Viable Zimbabwe Currency, Chakravarti said:

Let us accept that we already have the bond notes as a local currency. RBZ has put a peg between the bond and the US dollar and yet it is not equal.

My recommendation is that to eliminate the liquidity crisis, government needs to remove the peg and let the bond note operate on its own and that way it will be a real currency.

His views were echoed by former Minister of Finance Tendai Biti who said:

I agree with Ashok Chakravarti that the bond notes area a currency because they are supposedly 1:1 with the US dollar, they are legal tender.

However, we are living in an era of fake news and this is fake money. It is fictitious money as it is not backed by anything.

No one has seen the term sheet of the Afreximbank facility so we do not know if it even exists and right now (Reserve Bank governor John) Mangudya has said there are more bond notes backed by the same Afreximbank facility. It is pure gross misrepresentation backed by nothing.

 

More: The Independent

 


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Bond NotesUniversity of ZimbabweTendai Biti

Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were... Read More About Bond Notes

The University of Zimbabwe is the oldest tertiary institution in Zimbabwe that offers degrees, diplomas and certificates in various disciplines such as agriculture and law. Read More About University of Zimbabwe

Tendai Laxton Biti is a politician and currently one of the 3 Vice Presidents of the Movement for Democratic Change (MDC). He was elected the vice presidency in May 2019 at the MDC Congress. Biti is also one of Zimbabwe's most prominent lawyers. Biti is... Read More About Tendai Biti

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