Thursday, 16 February 2017

Only "registered traders will get US$" says RBZ - confirming bond note hyperinflation +ve. By W Mukori

In his 2017 Monetary Policy Statement, RBZ Governor Dr John Mangudya said the central bank would set up a facility for bona fide cross-border traders registered with any recognised association to be accessed from March 1, 2017.

Here we go!

The regime is now dictating who can and who cannot get foreign currency; the very thing it said it will not do because, like it or not, by doing so it is placing a premium value one on the foreign currency and thus devaluing the local bond note.  

When the regime introduced the bond notes the nation was told as long as one has the money in their account; they would choose, freely, whether to be paid in bond notes or US$. The two currency were of equal value and interchangeable and the regime promised to keep them that way. By allowing “bona fide cross-border traders” only to get the foreign currency and denying the same to everyone else the RBZ has, per se, place a premium value of foreign currency and devalued the local bond note.

The RBZ has just launch the black-market trade of bond notes for foreign currency and the going rate is NOT one US dollar to one bond note! Hyperinflation is back!

When Zanu PF first muted the introduction of bond notes, many people warned that this was bringing back the discredited Z$ by the back door. The regime’s complete lack of financial discipline and insatiable greed were the root causes of the country’s world record breaking hyperinflation of 500 billion percent and Z$ trading at Z$ 100 trillion-trillion: US$1 (one single dollar). The regime was force to scrap the Z$ in November 2008 and promised never again to bring back the Z$. The regime was breaking its promise and bring back the Z$ but calling it bond note!

After eight years of some forced financial discipline; the regime continued to spend recklessly but was constrained by the fact that the country had to EARN the foreign currency to pay for everything as contrast to it printing as much Z$ as it wished; the regime has certainly straining at the leash, it desperately wanted to bring back the Z$. Give the regime had not change in anyway, it was still corrupt, incompetent, lacked financial discipline, etc., etc. it was clear the bond notes will suffer the same fate of hyperinflation as the Z$.

Zanu PF imposed the bond notes on the people of Zimbabwe in November 2016 and now, less than six months later, the bond note has lost its value relative to the foreign currency. It was none other than RBZ Governor Dr John Mangudya, by allowing some people to get foreign currency whilst denying it to others, who has officially broken the equity of the bond note to US dollar and set the former on the slippery inflation slope.

Ladies and gentlemen, comrades and friends! The bond note has lost its anchorage, the nightmare years of hyperinflation of the Z$ are back again. The bond note has caught the dreaded inflation virus that killed the Z$; the bond note is hyperinflation positive! We are in for yet another super rough ride!

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