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Opinion / National


09 Apr 2019 at 15:19hrs | Views
In February, Reserve Bank Governor, John Mangudya announced the introduction of the RTGS dollar - the currency that confirmed what we knew all along: one is not to one. The RTGS dollar was initially set at a rate of USD 1 to RTGS$ 2.5 on the interbank exchange rate, but quickly started creeping up and is today trading at USD 1 to RTGS$ 3.1. On the black market, one US dollar will fetch you about 4.45 RTGS dollars. The prices of consumer goods are also increasing, as imports become more expensive and the purchasing power of the local currency decreases.

Since the introduction of the "new" currency in February, the price of consumer staples such as rice, sugar, and oil has risen as much as 60 percent. We know - and we know that you know - because everyone's pockets are hurting. But Finance Minister Mthuli Ncube seems confused. Price changes should be determined by inflation trends, Minister Ncube said.

The Minister added that month-on-month inflation was slowing "It is actually bad economics to link price increases to the exchange rate. That's not how you do it, it is profiteering," Mthuli told reporters. If you're curious about "good economics" we'd suggest a quick read of how inflation is actually calculated. Might be time for the good minister to do some revision.

Equal but different
Back when one was to one - officially, at least - more than two dozen Nedbank employees thought they'd take advantage of the official exchange rate, and replace the real US dollars in customers' accounts with electronic money. The government kept claiming that the two were equal, so on face value it may have seemed that there were no wrong-doing. However, the scam has allegedly cost the bank more than one million dollars from October last year to March 2019. Twenty eight suspects were arrested and charged with fraud last week. Zenzele Ndebele tweeted: "This is what RBZ has been doing since introducing the bond note. The whole bond note issue was a scam."

'Real' US Dollars
During a visit to Manicaland, President Emmerson Mnangagwa announced to gathered crowds that the US embassy in Harare had informed him of a 2.5 million dollar donation to support ongoing cyclone relief efforts in Zimbabwe. It seemed the prez was somewhat preoccupied by the fact that the donation came in the form of hard currency. He emphasized the fact that the assistance would come as "...American dollars. Not these RTGS$! No, US dollars. Real US dollars."

Source - kubatana
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