Zimbabwe introduces the RTGS Dollar currency

The much-awaited monetary policy statement presentation has come and gone in a few minutes. John Panonetsa Mangudya, the governor of the Reserve Bank of Zimbabwe, introduced the RTGS dollars as a currency to trade along the other currencies in the domestic market.

The RBZ is, with immediate effect, establishing an inter-bank foreign exchange market in Zimbabwe to formalise the trading of RTGS balances and bond notes with US dollars and other currencies on it willing-buyer willing-seller basis through banks and bureaus de change under the following framework:

Below is the essential portions of the very brief statement that John Mangudya, the governor of the Reserve Bank of Zimbabwe presented in Harare today:

i. 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.

ii. The RTGS dollars shall be used by all entities (including government) and individuals in Zimbabwe for the purposes of pricing of goods a. services. record debts, accounting and settlement of domestic transactions.

iii. The use of RTGS 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. In this regard, prices should remain at their current levels and or start to decline in sympathy with the stability in the exchange rate given that the current monetary balances have not been changed. In this respect, the RBZ will commit all its efforts to use the instruments at its disposal to maintain the stability of the exchange rate.