Zimbabwe: RBZ Introduces U.S. Dollar Savings Bond

The Reserve Bank of Zimbabwe (RBZ) has brought to the market a United States dollar-denominated savings bond with an interest rate of 7,5 percent per annum to promote a savings culture among Zimbabweans.

With inflationary pressures having a negative impact on most savings instruments on the local financial services market, the US dollar savings bond is expected to provide a much more sustainable offering.

It is largely expected that the "new" savings bond will help to accelerate the empowerment of the banking public by providing an investment instrument with high-yielding returns as well as offering safe and secure investment.

The US-dollar denominated instrument will complement the existing RTGS dollar/ZWL savings bond, which was introduced in 2017 to "mop up excess liquidity".

While presenting the 2019 Mid-term Monetary Policy Statement last Friday, central bank governor Dr John Mangudya said the new savings bond will also benefit both individuals and companies that hold nostro foreign currency accounts (FCAs).

"In order to promote a savings culture and to provide reasonable return on FCA nostro account deposits and US dollar cash held by individuals and firms,

the bank is with immediate effect, introducing US dollar-denominated savings bonds alongside the current ZWL$ denominated savings bonds," said the governor.

The US dollar savings bond will have the following features: Interest rate of 7,5 percent per year; a minimum tenure of one year; tax exemption, in line with Government policy; liquid asset status; tradable; and acceptable as collateral for overnight accommodation by the RBZ... Read more on All Africa

Source: All Africa