Reports have indicated that Zimbabwe’s local currency, the Real Time Gross Settlement (RTGS) dollar, has lost value. Since introduction, it has lost about 20% of its value.
There is a feeling in the market that the formal market rate is being managed by the central bank, so export earners are reluctant to sell. But now that the rate has weakened further, we expect the market to be liquid going forward.
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When the RTGS dollar was introduced, late February 2019, the Reserve Bank of Zimbabwe put an official rate of RTGS$2.5:US$1. This has since devalued to current levels. The official exchange rate is however 40% lower than what is prevailing on the parallel market, where the RTGS dollar is trading at 4.2 times the greenback.
More: Fin 24