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