The Reserve Bank of Zimbabwe Governor John Mangudya on Wednesday introduced a new currency, the RTGS Dollar.
Mangudya revealed that the country has abandoned the 1:1 ratio between bond notes and US dollars, a rate maintained by the central bank for nearly three years. He said:
We say that the RTGS dollars are composed of RTGS balances, bond note and bond coins and are in the basket of currencies which Zimbabweans are using.
Ashok Chakravati, a local economist had this to say:
It’s a request that has been in the works for many months by companies. It is a sign that this is a listening government and also a listening central bank.
Another economic commentator, Neville Mandimika from Rand Merchant Bank said a local currency was indeed needed though the timing may not be appropriate. He said:
The critical issue here is on how it’s introduced. There are various steps that must be followed to ensure that the currency will be accepted as a store of value.
Of these, the most important is ensuring that the economy has adequate forex reserves, which will act as a shock absorber. At this stage, the reserves simply aren’t there to justify its reintroduction.
Timeslive report summaries the major highlights of the Monetary Policy Statement as follows:
- effective 25 February, depositors will be able to move US dollars locally between banks under the interbank system;
- essential imports such as fuel and electricity will continue to have forex allocated by the Forex Allocation Committee;
- gold producers will keep 55% of their earnings in foreign currency;
- tobacco and cotton growers will receive 30% of their earnings from crop sales in foreign currency.
- Tobacco merchants will have 80% of their earnings in foreign currency;
- All forex holdings will be liquidated within 30 days at the market rate for the day; and
- a legal instrument will be gazetted that allows for the use of RTGS dollars and all entities, including government and individuals, will recognise the new currency.
Zimbabwe RTGS Dollars are a Zimbabwean currency introduced on 20 February 2019 by the Reserve Bank of Zimbabwe. At introduction, the currency consisted of existing RTGS balances in bank accounts, Bond Notes cash and Bond Coins. The introduction of the RTGS Dollars was announced by... Read More About RTGS Dollars
The Reserve Bank of Zimbabwe (RBZ) is the central bank of Zimbabwe. Its offices are located at number 80 Samora Machel Avenue in Harare. The Reserve Bank of Zimbabwe operates under the Reserve Bank of Zimbabwe Act, Chapter 22: 15 of 1964. The Act provides... Read More About Reserve Bank of Zimbabwe