Bond Notes Not The Problem, Issue Is Too Much Money Chasing Too Little Forex: Mangudya

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has dismissed claims that the bond notes are behind the economic problems in Zimbabwe. Instead, the governor blamed the economic woes on the lack of foreign currency which resulted in too much money chasing too little foreign currency. Mangudya who is set to deliver his first post-election monetary policy statement today told NewsDay,

It is a media fallacy that we have time and again tried to explain, but we have people who seem to have their minds set on a negative perception of things. The bond notes do not increase money supply which is the major driver of inflation. Our problem is too much money chasing too little foreign currency. If you look at it, the parallel market rate for Real Time Gross Settlement (RTGS) or other electronic transactional platforms is much higher than that of bond notes and we cannot, therefore, argue that we must remove this in order to bring order…This is why we are arguing for increased production and exports, that’s the way to go and we must stimulate that side of our economy.

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More: NewsDay