Monetary Policy Statement: Has RBZ introduced local currency via backdoor?

The Reserve Bank of Zimbabwe has read a riot act to errant bureau de change operators who are practicing unwarranted behaviour bent on demonising the essence of the re-introduction of such by the Reserve Bank of Zimbabwe, Zim Morning Post has learnt.

Reserve Bank of Zimbabwe governor Dr John Mangudya announced the Monetary Policy Statement (MPS)Wednesday and he ditched the 1:1 United States dollar to bond exchange rate as reported by the Zim Morning Post on Tuesday.

He introduced a raft of monetary policies that he claimed were aimed at  ‘strengthening demand for domestic forms of payment and to preserve forex for external payments, business, personal travel and servicing of government’s external obligations’.

However, some economists have deemed the introduction of the ‘RTGS dollar’ as an end to dollarization and the advent of a local currency which is being   ‘smuggled’   into the system through the use of semantics.

Revered economist and MDC Alliance secretary for economic affairs Tapiwa Mashakada said this move was tantamount to introducing local currency.

“ My reading of the MPS is that Zimbabwe now has a virtual local currency called “RTGS Dollar”. This is a Zim dollar by any means. The local unit will be determined by the interbank market of forex and forex bureaus. These trading rates will be published daily in banking halls and the media. The economy has de-dollarized cleverly, he submitted.

He further submitted that the United States Dollar was now trading against a new Zim dollar.

“ USD are now foreign currency. My prediction has come true. Zimbabwe now has a Sovereign currency called “RTGS DOLLARS” which is a euphemism for Zim dollars. It’s like saying you eat bacon but not pork. The domestic currency has bounced back without addressing the key fundamentals, “he said.

Mangudya said the ‘RTGS dollars’ shall be used by all entities including government, individuals in the country.

“It shall be used for the purposes of pricing of goods and services, record debts, accounting and settlement of domestic transactions,” he said.

He said the establishment of the Interbank Foreign Exchange market will also authorize bureau de change to purchase  forex without limit but shall be limited to sell forex for small transactions to a daily limit of USD10 000.

“Interbank foreign exchange market establishment is important to bring sanity in the forex market. Monetary policy statement seeks to correct that,” he said.

Some economists however argued that the market needs guidance.

“The governor should have mentioned trading levels .What if people start trading at 8.0? The market needs guidance,” said an economist who refused to be named.

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