As we have mentioned in an early article, the government has finally abandoned the 1:1 ship. Bond notes, coins, Ecocash, Telecash and bank balances are now known as RTGS dollars. Personally, I think he should have just called them bollars like the rest of us but at least the governor is on the right track.
So these bollars or RTGS dollars as our governor likes to call them shall be sold at a variable exchange rate in the formal banking system.
RTGS, bond notes and coins to be immediately denominated as ‘RTGS Dollars’. The legal instrument giving effect to this has been prepared and will be gazetted soon
“RTGS dollars have become one of the currencies in the currency bucket of the multi-currency system of the economy”
The RTGS dollars shall be used by all entities in Zimbabwe for the purposes of pricing of goods and services, debts, accounting and settlement of transactionsWe have put in place measures to maintain stability as we establish an interbank foreign exchange market in Zimbabwe to formalise the exchange of Bond and RTGS with USD and other currencies”
Bollars are now our official currency
As always the good governor has been a chicken and shied away from explicitly presenting us with a new currency. Instead, he continues to hide behind his bond notes which like James Bond of movie fame continue to do all his dirty work. Zimbabwe now has a de facto new currency: the bollar.
Everything will now be priced and sold in bollars as cited above. He has also ruled out dollarisation as undesirable. Again I could not agree more. I am in the Rand camp myself as the dollar makes our exports rather uncompetitive.
Floating the bond and pricing everything in Zimbabwe in bollars brings about much-needed relief in the industry. It now immediately means, for example, Zimbabwe does not have the most expensive fuel and our exports are now reasonably priced.
The RBZ gives up
This Monetary Policy is what we business-minded people have been calling for for ages. The RBZ has long resisted these reforms in order to protect the government and certain higher-ups. With this statement they have now essentially given up.
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2 comments
My questions before i make further comments .
1.What is the new “Legal” rate between RTGS $ and USD? Why did the gov ignore this vital announcement?
2. Who will regulate that rate ? It seems he simply implied we will walk into the banks and find out the rate of the day.
3. How will they Accurately rate the RTGS to USD ? Remember we were rating the bond note to the usd at 1 is to 1. Now we are including bank balances, hard cash and mobile money. Bank balances are basicaly backed by treasury bills. How exactly will they regulate all these variables.
4. What will stop them from increasing and decreasing the rate to cause certain “effects” that will fall in favour of the big fish?
We need answers fast!
Please download the monetary policy and read it for answers to questions 1,2 and 3.Once you have read it you can deduce your answer to 4.The answers are there in the monetary policy you will get them faster if you read it.