RTGS Dollar

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The RTGS Dollar, nicknamed zollar,[1] is a currency in Zimbabwe which was introduced on 21 February 2019 and came into effect after the February 2019 Monetary Policy was enacted by the Governor of the Reserve Bank of Zimbabwe, John Mangudya. The currency is made up of bond coins, bond notes and RTGS balances.[2] The original bond notes came in to become part of Zimbabwe's multi currency system which was introduced in 2009. They were renamed RTGS dollars in 2019, and in June 2019 became the only legal currency in Zimbabwe, replacing the multi currency system.[3] The introduction of the currency was well timed after a separation of RTGS FCA and Nostro FCA accounts.[4][5]

Purposes[edit]

The purposes of the currency are the same as other currencies, including:

  • pricing goods and services
  • recording debts
  • accounting
  • settlement of domestic transactions [6]

However, the core purpose of the RTGS dollar was to address some of the economic and financial challenges faced by the Zimbabwe, especially the relative lack of foreign currency held by the government,[3] but officially including:

  • normalise the foreign currency market
  • promote diaspora remittances
  • protect foreign investors
  • promote exports
  • promote locals from pricing of goods in foreign currency only

Value[edit]

Officially the rate of the RTGS$ to the US$ was originally set at 1 US$ equaled 2.50 RTGS$ (1 RTGS$ = .40 US$), but this was not the case on the open markets where the value fluctuated in the first half of 2019 between US$1 = 7 RTGS$ and US$1 = 13 RTGS$.[7][8][9][10]

See the current rate here: https://www.marketwatch.co.zw/ [11]

The exchange rate is determined by the forces of supply and demand on an auction market the Reserve Bank of Zimbabwe set up along with the announcement of the RTGS Dollar. The market is called Interbank Foreign Currency Exchange Market and is made up of banks and Bureau de change.[12]

References[edit]

  1. ^ https://www.economist.com/finance-and-economics/2019/05/23/zimbabwe-struggles-to-keep-its-fledgling-currency-alive
  2. ^ Reporter, Staff (20 February 2019). "RBZ introduces "RTGS Dollars"". The Zimbabwe Mail. Retrieved 6 May 2019.
  3. ^ a b "Why Zimbabwe has banned foreign currencies". BBC News. 26 June 2019.
  4. ^ Chaparadza, Alvine (1 October 2018). "Banks Given Two Weeks To Separate Nostro US Dollar Accounts And Local RTGS/Bond Accounts". Techzim. Retrieved 6 May 2019.
  5. ^ "Does Zimbabwe have a new currency?". 26 February 2019. Retrieved 6 May 2019.
  6. ^ "Monetary Policy Statement: Establishment of an Inter-bank Foreign Exchange Market to Restore Competitiveness" (PDF). Reserve Bank of Zimbabwe. Retrieved 6 May 2019.
  7. ^ Stoddard, Ed (1 July 2019). "Zimbabwe takes a big gamble in its bid to dump the greenback". Business Maverick. Archived from the original on 3 July 2019. Cite uses deprecated parameter |dead-url= (help)
  8. ^ Zwinoira, Tatira (22 March 2019). "RTGS$ weakens 16% in first month". NewsDay. Zimbabwe. Archived from the original on 23 March 2019. Cite uses deprecated parameter |dead-url= (help)
  9. ^ "RTGS dollar plunges by 140%". NewsDay. Zimbabwe. 12 June 2019. Archived from the original on 13 June 2019. Cite uses deprecated parameter |dead-url= (help)
  10. ^ Latham, Brian (4 June 2019). "Zimbabwe's Quasi-Currency Continues on Its Precipitous Slide". Bloomberg. Archived from the original on 4 September 2019. Cite uses deprecated parameter |dead-url= (help)
  11. ^ "Online Publisher Of USD/RTGS Rates Suspends Service After 'Threat From Gvt'". TechZim. 7 July 2019. Archived from the original on 8 June 2019. Cite uses deprecated parameter |dead-url= (help)
  12. ^ "Zimbabwe's RTGS dollars explained | IOL Business Report". www.iol.co.za. Retrieved 6 May 2019.

External links[edit]