Zim Could Have A New Currency Before End Of September – Analyst

In an opinion piece for the Zimbabwe Independent, Victor Bhoroma, a business and economic analyst said that Zimbabwe may have a new currency as early as September this year.

Bhoroma opines that the legal instrument used to introduce the RTGS dollar is temporary. He writes:

The introduction of the impending currency is largely necessitated by the fact that the legal instrument used to introduce the RTGS dollar is temporary with a specific timeline of six months from the day of the proclamation by the office of the president.

In principle, therefore, Zimbabwe would need to have local currency before the end of September 2019.

The analyst further argues that the The Exchange Control Regulations (Amendment) of 2019 (SI 32) and Presidential Powers (Temporary Measures) for (Amendment) of the RBZ Act and RTGS Electronic Dollars Regulations of 2019 (SI 33) meant that the RTGS dollar is legal tender in Zimbabwe though they do not prohibit the use of multiple currencies adopted in 2009.

This entails that multi-tier pricing in the local market is legal.

However, for a new currency to work, there are certain fundamentals that need to be in place. He continues:

The fundamentals that need urgent attention include; efforts to build confidence in the economy and in RBZ as a monitory authority, dealing with high government expenditure (average budget deficit of $2,3 billion from 2016 to 2018), dealing with rampant corruption, low agricultural and industrial production capacity which leads to recurring trade deficits and clearing foreign debt arrears through adhering to payment plans.

… Any currency introduced by the government will not sustain as long as key economic fundamentals that support economic growth are ignored.

… The new currency will meet the same fate faced by the Zimbabwean dollar, bearer’s cheques, bond note and the RTGS dollar.

More: Zimbabwe Independent

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Real-time Gross Settlement (RTGS) is a fund transfer system where the transfer of money takes place from one bank to any other bank on a "real time" and on a gross basis. Settlement in "real time" means a payment transaction is not subjected to any... Read More About RTGS

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 RBZ

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