Harare: Zimbabwe has de-dollarised and now has a ”virtual local currency called RTGS Dollars”, said Former Minister of Economic Planning and Investment Promotions, Tapiwa Mashakada, in his analysis of the 2019 Monetary Policy Statement.
“This is the return of the Zimbabwe dollar by any means. The local unit will be determined by the inter-bank market of forex and forex bureaus. The trading rates will be published daily in banking halls and the media. The economy has de-dollarised cleverly,” Mashakada commented.
”Zimbabwe now has sovereign currency called ‘RTGS Dollars’ which is a euphemism of the Zimbabwe dollar. The domestic currency has bounced back without the government addressing the key fundamentals,” Mashakada added.
The Zimbabwe Central Bank Governor John Mangudya in his Monetary Policy Statement has announced the establishment of inter-bank foreign exchange market to formalise the exchange and trade of RTGS Dollars and the United States dollar among other foreign currencies.
“…Denominating the existing RTGS balances, bond notes and coins in circulation as RTGS dollars in order to establish an exchange rate between the current monetary balances and foreign currency. The RTGS dollars thus become part of the multi-currency system in Zimbabwe. The legal instrument to give effect to this has been prepared,” Mangudya said in his MPS.
Mangudya added: “The use of RIGS dollars for domestic transactions will eliminate the existence of the multi-pricing system and charging of goods and services in foreign currency within the domestic economy.
“The Bank has arranged sufficient lines of credit to enable it to maintain adequate foreign currency to underpin the exchange market. This is essential to restore the purchasing power of RTGS balances through safeguarding price stability emanating from the pass-through effects of exchange rate movements.”
Many economists feel that Mangudya has simply re-introduced the Zimbabwe dollar which was dumped in 2008 at the height of the world- record-breaking inflationary crisis.
The troubled southern African country then introduced a basket of foreign currencies after dumping the worthless local currency.
Zimbabwe, as a measure to contain a biting cash crisis, adopted a surrogate currency – the bond note in 2016.
The bond note fell in value against the U.S Dollar despite the government’s gazetted 1:1 parity.