Chinamasa quizzed over bond notes-insists that’s the best solution for Zimbabwe to recover

HON. P. D SIBANDA: My question is that values of currencies by nature are maintained through confidence.  Right now you are introducing this currency, your currency into this market which you are literally foisting– [HON. MEMBERS: Inaudible interjections.] –

THE HON. SPEAKER: Order, order, please do not make a statement.  Can you ask your supplementary question?

 HON. P. D SIBANDA: Thank you Hon. Speaker.  Hon. Minister, the value of a currency is maintained through confidence in that currency.  Now you are introducing a currency in a market in which the entire –

THE HON. SPEAKER: You are making another statement again. Please ask the question.

HON. P. D SIBANDA: No, it is not a statement Mr. Speaker.  I just want to get the question.  You are introducing a currency in a market that is literally resisting that currency and you have pegged that currency at one unit of that currency to one US$.  How do you intend to maintain that exchange rate where almost the whole market is resisting that currency?  Thank you.

HON. CHINAMASA: Firstly Mr. Speaker Sir, I dispute the allegation that the whole market is resisting.  In fact, there is nothing being foisted on the public.  The truth of the matter is that the criticism we get from those who are going to benefit from the bonus scheme is that, it is too little.  The criticism is that the 5% incentive is too little.  They would wish it was 15%.  Like I said, we are targeting those who export.  If you are not exporting, you have nothing to worry about; you are just a consumer of what these people have done for you without even working.  So, we need to make that clear.

The issue he raises about the value of a currency being supported by confidence, it is true – [HON. MEMBERS: Inaudible interjections.] –

 THE HON. SPEAKER: Order, order.  Hon. Members, you represent people out there.  If you ask a question, you must listen to the answer so that you are able to ventilate that answer and be carriers of correct information.

HON. CHINAMASA: I was saying that the Hon. Member is correct that the value of any currency is supported by confidence and that is the case with the United States dollar.  It has no intrinsic value, it is what they call a fiat currency, just by order to say; this is a currency and everybody accepts it.  It has no value at all; it is not supported by gold or anything as used to be the case.  So, I agree that it is supported by confidence, which is why it is very important as we go forward to restore whatever we are going to do with confidence.  Do not withdraw it because if you do, you do it at the peril of yourself, families and businesses.  That is the truth.  So, it is important as a nation that we give confidence to what Government is doing, including the introduction of bond notes.  If you do not give it confidence, businesses collapse as they are collapsing because there are not enough US$ in the market.  There is no medium of exchange in Zimbabwe right now because there are no US$ cash.

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