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Zimbabwe central bank sells bond to import coins

05 September 2014, 13:47

Harare - Zimbabwe's central bank has issued a $50 million bond to raise money to import "special" coins equivalent in value to U.S. currency to ease a shortage of change in the economy, the state-owned Herald newspaper reported on Friday.

The southern African country ditched the worthless Zimbabwe dollar in favour of foreign currencies in January 2009 after hyper-inflation reached 500 billion percent.

Zimbabwe mainly uses the U.S. dollar and South African rand for transactions but businesses usually round-off prices and give consumers vouchers or sweets as change because the country lacks coins.

Ecuador, another country that uses the U.S. dollar as its currency, has special coins, centavos, which have the same denomination and value as U.S. coins.

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The Herald quoted John Mangudya, the Reserve Bank of Zimbabwe governor, as saying the country had failed to import U.S. coins in the past because freight charges were higher than their value.

The bank will instead import coins with similar denomination and value to U.S. dollar coins, he said.

"We had to arrange a $50 million bond facility which is a United States dollar bond for coins," Mangudya was quoted as saying, adding that the problem of coins had affected the pricing of goods in Zimbabwe.

Mangudya did not give the terms of the bond or where the coins would be imported from.

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Central bank officials could not immediately be reached for comment.

"It is a sensible idea and will make life easier for consumers. This will not have any effect on money supply because it is a small amount," said Anthony Hawkins, a lecturer at University of Zimbabwe's Graduate School of Management.

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- Reuters

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