RTGS dollar weakens on interbank market, further slide expected

RTGS dollar weakens on interbank market, further slide expected 1
RTGS dollar weakens on interbank market, further slide expected 2

HARARE – Zimbabwe’s
new currency traded at 2.7 against the U.S. dollar on the interbank market on
Thursday, its weakest level since the central bank last month removed a peg for
its surrogate bond notes and electronic dollars, official data showed.

The central bank
ditched the discredited 1:1 dollar official peg on February 20, and merged the
bond notes and electronic dollars into a transitional currency called the RTGS
dollar.

The value of that
currency had held unchanged at 2.5 to the U.S. dollar since February 22,
leading to accusations the central bank was manipulating the exchange rate.

Reserve Bank of
Zimbabwe (RBZ) data showed the mid-rate was at 2.7 to the dollar on Thursday.
Banks are allowed to buy and sell U.S. dollars at 2.5 percent either side of
that rate.

Governor John
Mangudya told parliament on Monday that he expected the RTGS dollar to weaken
further by the time important tobacco auctions open next Wednesday.

Tobacco is
Zimbabwe’s second-largest earner of foreign currency after mining and last year
brought in more than $800 million.

On the black
market, the RTGS rate was unchanged at 3.8 to the dollar.

Dealers at local
banks said the central bank was still drip-feeding the market with some
dollars, which some saw as an attempt to influence the exchange rate.

“The message from
the RBZ is that ‘we don’t want irresponsibility’ from the banks, which has been
taken to mean that they want a gradual weakening of the exchange rate up to a
certain level,” a dealer at a local bank said.

Zimbabwe’s economy has been crippled by a cash crunch that has caused shortages of fuel, food and medicine, the latter of which doctors say is crippling public hospitals. – Reuters

Source: Zim Live

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