'RTGS Dollar Faces Uncertain Future'

5 years agoFri, 15 Mar 2019 08:58:20 GMT

A regional economic think-tank, NKC African Economics (NKC), has warned that Zimbabwe’s currency risk score remained high due to low production, company closures and rising inflation.

The country introduced a new currency a few weeks ago, the RTGS Dollar which was pegged at 2.5 to the Greenback when it started to trade at the interbank market.

In its currency risk note, NKC said:

Zimbabwe and Sudan’s currency risk scores are at the very high end of the spectrum, with both countries experiencing rampant inflation and extremely low forex reserve buffers.
We also have concerns about the extent of government borrowing from the central bank and the impact that will have on inflation.
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Most recently, the RTGS dollars was trading at 3,8/$ on the black market. On February 20, the central bank officially acknowledged that the currency is no longer on par with the dollar, saying that the rate would be market-determined.
However, it has subsequently been pegged at 2.5/$. Given the lack of trust in the new currency, the outlook remains highly uncertain.