Zimbabwe is said to have secured a $500 million loan from the African Export-Import Bank, using platinum production as collateral, in a bid to try and stabilize the country’s currency market.
The Reserve Bank of Zimbabwe announced Saturday, that the money would be released into the foreign-exchange market from Monday, however, it did not mention where the money came from.
The loan comes after a currency-trading system instituted in February, wherein a quasi-currency known as RTGS dollars is traded on an interbank market, floundered because of a lack of liquidity and transparency.
While the central bank has allowed the RTGS$, 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.
Finance Minister Mthuli Ncube later said in a tweet the funds were secured from “international banks,” without identifying them. The loan is said to be of four years in duration.
The use of platinum as collateral is another sign of Zimbabwe’s lack of creditworthiness, so the reserve bank had to resort to the use of commodity production, since the country has been struggling to borrow money from banks using the standard repayment terms.