Zimbabwe secured a $500 million loan from the African
Export-Import Bank to try and stabilize its currency market by offering
platinum production as collateral, a person familiar with the details of the
agreement said.
The Reserve Bank of Zimbabwe on Saturday announced on
Twitter that the money would be released into the foreign-exchange market from
Monday, without saying where it came from. Finance Minister Mthuli Ncube later
said in a separate tweet that the funds were secured from “international
banks,” without identifying them. The loan is of four years duration, the
person said.
The use of platinum as collateral is another sign of
Zimbabwe’s lack of creditworthiness as the country has struggled to borrow
money from banks using standard repayment terms and has had to resort to its
commodity production. As of the end of last year the country owed $17.8 billion
to creditors billions of dollars to creditors and is arrears to international
lenders such as the World Bank and the African Development Bank.
The loan comes after a currency-trading system instituted
in February, whereby a quasi-currency known as RTGS dollars is traded on an
interbank market, floundered because of a lack of liquidity and transparency.
While the central bank has allowed the RTGS$, which it has previously insisted
was valued at par with the dollar, to weaken to 3.48 to the dollar, the black
market rate is 6 to the dollar. It had fallen as low as 7 before the loan was
announced.
For more about the loan and Zimbabwe’s currency market click
here
George Guvamatanga, the country’s finance secretary,
declined to comment, while Reserve Bank Governor John Mangudya didn’t
immediately respond to a request for comment. Obi Emekekwue, a spokesman for
Cairo-based Afreximbank, didn’t answer calls made to his phone or respond to
email.
Zimbabwe is currently in the throes of its worst economic
crisis since 2008 with shortages of medicine, fuel and electricity commonplace.
Platinum, mined by Anglo American Platinum Ltd. and Impala Platinum Holdings
Ltd., is one of its main sources of foreign exchange along with gold and
tobacco.
Afreximbank is partly owned by African governments.
Bloomberg
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