RBZ Governor John Mangudya Introduces New Currency – “RTGS Dollars”
Presenting the 2019 Monetary Policy Statement today, Reserve Bank of Zimbabwe (RBZ) governor John Panonetsa Mangudya introduced a new form of money known as “RTGS Dollars”. These “RTGS Dollars” basically consist of RTGS balances, bond notes, and coins. Said Mangudya,
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 transactions
We have put in place measures to maintain stability as we establish an interbank foreign exchange market in Zimbabwe to formalize the exchange of Bond and RTGS with USD and other currencies.
These “RTGS Dollars” are not tied on the 1:1 rate against the United States Dollars but will instead be sold at a variable exchange rate in the formal banking system.
Summary Of the 2019 Monetary Policy Statement
- RTGS dollars is a currency; in addition to multi-currency; will be the functional currency; used for pricing, settlement of local transactions; the budget is in this currency; legal instrument has been crafted, reference currency changed from USD to RTGS
- Lines of credit arranged to stabilize the currency
- RBZ will provide seed FX so that every bank can trade Friday morning
- RBZ will sell this FX to banks at a rate of allowable margin 2.5%
- Fuel, cooking oil, electricity etc will get separate allocations – will not be part of interbank applications
- 3.5 million individual accounts have $205 million only. People have no money! A bulk of RTGS is held by about 1,900 firms
- Managed float concept
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