Zimbabwe

Justin Bgoni, chief executive of the Zimbabwe Stock Exchange, received an unexpected call from a colleague last month: The government had decided to shut down the world’s best performing stock market, the Wall Street Journal reported. Until the suspension, announced June 26 in a tweet from Zimbabwe’s information ministry, the all-share index on the Harare-based exchange had jumped 677 percent since Jan. 1, even as local economists expect gross domestic product to shrink by more than 10 percent.

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Zimbabwe’s troubled national airline has failed to secure outside investment, dealing a blow to government plans to sell state-owned assets and secure much-needed revenue, Bloomberg News reported. The airline, which in Oct. 2018 was placed under administration, a form of bankruptcy protection, received expressions of interest from 10 international investors and had short-listed three bidders.

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South African Airways, the national airline that’s entered a form of bankruptcy protection, may only be offered 5 percent of the $60 million that it is owed by neighboring Zimbabwe in funds from ticket sales and hasn’t been able to extract from the country, Bloomberg News reported. The central bank’s Monetary Policy Committee plans to “reject the majority of debts” owed to institutions, a move it hopes will save the southern African nation much needed foreign currency, Eddie Cross, a committee member, said. The country is unable to pay for adequate fuel and wheat imports.
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Zimbabwe’s state-owned electricity distributor, grappling with drought and ageing equipment, said on Thursday it will disconnect mines, farms and other users as it looks to recover $77 million in unpaid bills, Reuters reported. The southern African nation is experiencing daily power cuts lasting up to 18 hours after a severe drought reduced water levels at the country’s biggest hydro plant. The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) is also being hampered by ageing coal-fired electricity generators which constantly break down.

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Zimbabwe’s central bank said it would stop printing money as part of a milestone deal with the IMF, which has agreed to monitor vital currency reforms in the southern African nation, the Financial Times reported. Under the terms of an IMF staff-monitored programme announced on Friday, President Emmerson Mnangagwa’s government will cease borrowing from the central bank to pay its bills, a practice that has exacerbated Zimbabwe’s debilitating currency crisis.

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Zimbabwe’s central bank has secured a $500 million loan from unspecified international banks to support interbank currency trading from Monday and ease a dollar crunch that has brought fuel and medicine shortages, Governor John Mangudya said, Reuters reported. The central bank introduced a new local currency in February, the RTGS dollar, and launched an interbank trading platform where businesses and individuals could buy and sell U.S. dollars. But dollars have been scarce on the official market, where a U.S. dollar fetches 3.4 RTGS dollars compared to 6.3 RTGS dollars on the black market.

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Zimbabwe has reached agreement with the International Monetary Fund (IMF) on a program of economic policies and structural reforms that could pave the way to the crisis-hit country re-engaging with international financial institutions, Reuters reported. Suffering from decades of decline and hyperinflation, Zimbabwe has not been able to borrow from international lenders since 1999, when it started defaulting on its debt. It has arrears of around $2.2 billion with the World Bank, the African Development Bank and European Investment Bank.

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Zimbabwe’s lenders, which include units of Standard Bank Group Ltd. and Ecobank Ltd., appealed to the central bank to raise interest rates that have been capped at 12 percent for the past two years, saying this would increase lending in the collapsing economy, Bloomberg News reported. They also proposed that the Reserve Bank of Zimbabwe introduce an overnight rate to facilitate lending between financial institutions and the central bank, Bankers Association of Zimbabwe submissions seen by Bloomberg show.

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Zimbabwe’s government dropped its insistence that a quasi-currency known as bond notes are at par with the dollar as it overhauled foreign-exchange trading and effectively devalued the securities, Bloomberg News reported. The measures are a step toward trying to create a new currency and stabilize Zimbabwe’s economy, which has been plunged into crisis as a shortage of foreign currency stoked the fastest increase in consumer prices in more than a decade and caused shortages of food, fuel and medicine.

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Not having a currency of its own hasn’t stopped Zimbabwe from sliding into a currency crisis, Bloomberg News reported. A scarcity of foreign exchange has led to long queues for fuel, bread and medicine and sent prices surging across the southern African country. Police clashed with protesters in the capital, Harare, on Monday as the main trade-union group started a strike after the government more than doubled gasoline prices to $3.31 a liter ($12.58 a gallon) over the weekend, the highest in the world, according to GlobalPetrolPrices.com.

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