Zimbabwe secured a $500 million loan from the African Export-Import Bank to try and stabilize its currency market by offering platinum production as collateral, a person familiar with the details of the agreement said.
The use of platinum as collateral is another sign of Zimbabwe’s lack of creditworthiness as the country has struggled to borrow money from banks using standard repayment terms and has had to resort to its commodity production.
The loan comes after a currency-trading system instituted in February, whereby a quasi currency known as RTGS dollars is traded on an interbank market, floundered because of a lack of liquidity and transparency. While the central bank has allowed the RTGS$, 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.
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.
CENTER FOR AFRICAN STUDIES
Center for Africa Studies (AFRAM) which located in Ankara, is an organization facilitating under the administration of African Affairs Council (AFAC). It makes various researches about Africa to enhance economic and cultural bounds between Africa and Turkey. AFRAM’s publishings has been shared with different institutions as they require to obtain.
Africa Observatory is one the publishing of AFRAM and it has been published each two weeks. It has been delivered to different institutions via e-mail.