ZIMBABWE’S local currency, the Real Time Gross Settlement (RTGS) dollar, has plunged by 140% to trade at US$1:ZWL$6 on the official interbank market, nearly four months after its introduction in February this year.
The Reserve Bank of Zimbabwe (RBZ) introduced the currency after scrapping the discredited 1:1 dollar peg for the surrogate bond notes and electronic dollars, merging them into a lower-value transitional currency called the RTGS dollar as part of monetary policy measures to address the country’s currency challenges.
The RTGS$ debuted at ZWL$2,5 to the greenback, while on the parallel market the rate was as high as US$1:ZWL$4 back in February. As of Wednesday the black market rate averaged US$1:ZWL$8,70.
Monetary authorities insist that the two markets will eventually converge stressing that there isn’t enough RTGS dollars in circulation to sustain the continued run of the parallel market rate.
Recently, Delta Beverages, which had previously complained of failing to access currency on the interbank market, said the platform had become more liquid and open.
Last Friday, President Emmerson Mnangagwa said the country will have a new currency by year end, adding uncertainty to an already unnerved market.
Most businesses are now pegging their prices in US dollars and use black market rates to calculate RTGS dollar prices.
Mnangagwa’s comments echo Finance minister, Mthuli Ncube’s position who has stressed that the southern African economy needs to regain its monetary policy as a means of dealing with the country’s macro-economic problems.
Following a devastating bout of record-setting hyper-inflation which rendered the country’s currency worthless,in 2009, Zimbabwe adapted the United States dollar and other currencies such as sterling and the South African rand.