“Bond Note Is The Strongest Currency In SADC”- Eddie Cross. Yes It Is, But………..

0
302

Posted

Prominent Zimbabwean Economist, Eddie Cross says the controversial bond currency is the strongest currency in the whole of southern Africa (SADC). Speaking to ZBC, the economist said:

advertisementUse EcoCash to buy NetOne & Telecel airtime online. Tap here

advertisement

The underlying economy actually is fine, it’s growing, exports are growing and the fundamentals are strong and this was reflected by the fact that by Christmas the rate to the RTGS (Real Time Gross Settlement) Dollar had come down to 2,83.Now at 2,83 everybody has got to understand that the bond note is the strongest currency in the SADC region, because it is a currency, and this indicates the underlying strength of the Zimbabwe economy despite the problems.

Today, the exchange rate stands at: $1 USD/ $3.6 bond notes and $1 USD/ 10.34 Pula (Pula is the strongest currency in SADC as of today). So, is it because one gets fewer Bond notes than Pula per $1 US Dollar, that Mr. Eddie Cross is saying that the Bond currency is the strongest currency?

advertisement

If so then….

Yes, mathematically his statement is true because you get very few bond notes for every US Dollar you exchange compared to what you get when holding other SADC currencies (you get more than double with other currencies).

However, if you consider that Eddie Cross’ ‘strongest currency in SADC’ works in Zimbabwe only (the bond notes are not accepted elsewhere), you will see that his assertion is misguided. How can the bond note be the most valuable currency when no other country is not accepting it for trade? Therefore, in theory, Yes the bond note is the strongest currency. But in practice, No its value is way less than other SADC currencies since we can’t exchange it with anyone else but us only.

Eddie CrossBond NotesRTGS

Edward Graham Cross (born 1940) is a prominent Zimbabwean economist and politician. He is the current member of parliament for Bulawayo South. He is also a founding member of the Morgan Tsvangirai led Movement for Democratic Change (MDC-T). Read More About Eddie Cross

Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were… Read More About Bond Notes

Real-time Gross Settlement (RTGS) is a fund transfer system where the transfer of money takes place from one bank to any other bank on a "real time" and on a gross basis. Settlement in "real time" means a payment transaction is not subjected to any… Read More About RTGS

LEAVE A REPLY

Please enter your comment!
Please enter your name here