RBZ’s decision to more than double the bond notes programme means the country is dollarizing says research body

International research body BMI Research has said that Zimbabwe is actually de-dollarising the economy after the Reserve Bank decided to increase the bond notes program from $200 million to $500 million. This will result in the rate of inflation increasing and will likely result in shortages of imported goods.

BMI Research said,

The Reserve Bank of Zimbabwe’s (RBZ) decision to more than double the size of its bond-note programme — to $500m from $200m previously — confirms our view that the country is headed towards de jure(official) de-dollarisation.

…The effect will be compounded by the likelihood of shortages of imported goods as the supply of hard currency with which to access foreign goods continues to fall.

Although the country is likely to benefit from an increase in tobacco production and gold prices over our short-term outlook, we do not believe this will be sufficient to restore the supply of hard currency in the economy to the point where businesses and households are no longer struggling with a lack of dollar liquidity.

More: NewsDay

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