Mangudya Praises Afreximbank For Providing the Bond Notes Facility

Image Credit: Kenyan Wall Street

Reserve Bank of Zimbabwe Governor Dr John Mangudya has praised the Afreximbank for providing the nation with the bond notes facility at a time when international lending institutions were snubbing the country.

Mangudya, who is also a member of the Afreximbank board of directors said that the Reserve Bank has continued to use Aftrades as its Lender of Last Resort window and for promoting interbank finance facility in his 2018 Monetary Policy Statement.

“The Aftrades facility, which was established in 2015 at a limit of US$200 million went a long way in alleviating liquidity shortages during 2017,” the RBZ governor said.

“The facility will run for another two years until February 2019. Total trades amounted to US$399.5 million in 2017.”

Afreximbank accepted to back the US$200 million facility after a German bank, Giesecke and Devrient refused the offer to print the bond notes.

The government had desperately turned to its neighbour South Africa and African countries without success as local pressure groups in Zimbabwe fought against the printing of the bond notes.

The pressure groups had also turned to courts as arguing that the bond notes, which are meant to address cash shortages in the country were not constitutional.

Printing of bond notes has however not addressed the cash crunch in Zimbabwe as the country still experiences queues on banks.

The bond notes, which are also in scarce have already been accepted by Zimbabweans who do not have an option but to use the pseudo currents amid cash challenges

Bond notes came into circulation in November 2016 despite resistance by citizens who took it as a ploy to re-introduce the Zimbabwean Dollar, a current that was dumped after the 2007-2008 hyper-inflation.

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