HARARE – Zimbabwe has floated its quasi-bond note currency, effectively devaluing the unit in what experts say is in preparation of a local currency through slow erosion of bloated bank balances that have driven Zimbabwe’s official inflation to above 50 percent.
Reserve Bank of Zimbabwe governor, John Mangudya, on Wednesday said in a 2019 Monetary Policy Statement that the government has had to do away with the 1:1 valuation for bond notes against the US dollar. After amalgamating the bond notes and electronic bank balances that also include mobile money, Zimbabwe has now denominated its quasi local units as RTGS dollars.
Economics expert, Tapiwa Mashakada, who is also secretary for economics in Zimbabwe’s main opposition, MDC Alliance, said the monetary policy had “de-dollarised cleverly” with the greenback, which has been in use as legal tender in Zimbabwe since 2009, becoming a “foreign currency” unit.
“Zimbabwe now has a sovereign currency called RTGS dollars which is a euphemism for Zim Dollars. The domestic currency has bounced back,” said Mashakada in response after Mangudya’s monetary policy.
The Zimbabwean central bank chief said “after taking account of the implications and putting in place safeguards to maintain stability in the fares market, the Bank 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.