How Business Has Reacted To The RTGS Dollars & New Forex Market
Following the announcement of Zimbabwe’s Monetary Policy which introduced a new RTGS dollar and also floated the exchange rate with the establishment of the Inter-bank Foreign Currency Market, business has weighed in.
Tino Kambasha, Fund Manager:
Our daily lives had already adjusted to 1:4 for us ordinary Zimbabweans so RBZ announcing it is just them agreeing with what we were already living (exactly like what happened in 2009 with Dollarization when we had dollarized about a year before the official announcement). “As long as the Prof doesn’t heed to the pressures that be and keeps his foot on the brake pedal, we should feel some relief in the medium term but we shall suffer in the short term
Godfrey Kanyenze, director for Labour and Economic Development Research Institute of Zimbabwe
It is a desperate measure that the governor has taken because the fundamentals are not right for the introduction of a local currency.
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Somkhosi Malaba CEO, Agribank
He has managed to deal with currency imbalances by allowing the rates to move to an interbank market rate. He has also indicated that he will provide some seed funding to the banks to meet bona fide import(s) requirements. Therefore, that will help to stabilise the exchange rate. By moving the rate, he is now allowing exporters to get the full value and not to subsidise importers.
Delma Lupepe Industrialist:
I am in full support of the monetary policy. I am sure in the near future we will be having our own currency. That is the next step. We are in the right direction. It could do a lot for us. For instance, remove price distortions. For us industrialists, it will help attract investors because investors could not understand the bond notes issue.
Neville Mandimika, analyst at Rand Merchant Bank:
“The move is largely constructive as the government now officially recognizes that US dollars and RTGS$ are not at parity. The introduction of a Zim dollar will be just in name, but the RTGS$ is essentially the Zim dollar.
Isaac Kwesu, Chamber of Mines chief executive:
It is our hope that the RBZ will pay the miners timeously to allow them to have adequate forex to import the equipment.
It is our prayer that the remaining percentage will be paid at the interbank rate to reduce the risk of affording the local inputs, which has gone up four-fold.
Sifelani Jabangwe, Confederation of Zimbabwe Industries president:
It will allow us to plan using the prevailing rate. Business was getting from the black market and some were now using extremely high rates, but now this will normalise because there will be an official rate to work with.
John Robertson, Economist
He didn’t mention it by name, but they have devalued it. We should now see a convergence of a stable rate going forward. Buyers and sellers will now need to meet and agree on a rate
Busisa Moyo serves as the Chief Executive Officer at United Refineries Limited.
The only move that I feel was not correctly analysed is the introduction of a 30-day limit. While I understand that it intended to encourage market players to use or spend their dollars on production, on the other hand, it will have the effect of driving dollar savings offshore.
Eddie Cross, Economist
I am not going to be surprised if the rate is going to weaken again a few days later, but his announcement is a welcome development. For more than a year, the country had been trading in the black market sector, which was not a good thing… What the governor has now done is to formalise the black market rate and we feel that is the way to go.
Tapiwa Mashakada, MDC Alliance’s secretary for economics:
This is Zimdollar by any means. The local unit will be determined by the interbank market of forex and forex bureaus. These trading rates will be published daily in banking halls and the media. The economy has de-dollarised cleverly. USD are now foreign currency. My prediction has come true. Zimbabwe now has a sovereign currency called ‘RTGS dollars’ which is a euphemism for Zim dollars. It’s like saying you eat bacon but not pork. The domestic currency has bounced back without addressing the key fundamentals. Goodbye dollarization hello Zim dollar.
Oswell Binha, EMCOZ president
The challenge with our country is that there are a lot of monumental mistakes that were done by the central bank and government in the past. It will not be easy for us as a country to correct those mistakes. As business players, we had put up what we call a call to action and we believe that, for once, government has listened to our call and plea. The pronouncement by the central bank is purely what we had proposed as business.
