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Zimbabwe president praises re-introduction of local currency

Zimbabwe Dollar Returns, a Decade After It Became Worthless

The previous currency troubles stem from the country abandoning the Zimbabwe dollar in 2009, after a bout of hyperinflation, in favor of the US greenback. Picture: Philimon Bulawayo, ReutersZimbabwe president praises re-introduction of local currency

ByFARAI MUTSAKA, ASSOCIATED PRESS HARARE, Zimbabwe — Jun 25, 2019

Zimbabwe President Emmerson Mnangagwa on Tuesday praised the re-introduction of the Zimbabwe dollar as the sole legal tender in the troubled country as a "return to normalcy."

Zimbabwe had for 10 years used the U.S. dollar and other foreign currencies after the Zimbabwean currency was dogged by hyperinflation.

Mnangagwa said it is the right time to scrap the use of foreign currencies, saying Zimbabwe's economy is "now functional" enough to adopt the usage of a single, local currency.

"We were living in an abnormal situation. We should actually be congratulated for taking this step," he told reporters at a press conference on the sidelines of a wildlife summit in the resort town of Victoria Falls.

"What we have done is we have gone back to normalcy," he said. "Normalcy is that the country must have its own currency."

Mnangagwa said the possession of foreign currency is not outlawed, but people will not be able to use it to buy items locally.

Finance Minister Mthuli Ncube on Monday announced the Zimbabwe dollar as the sole legal tender. Before Ncube's notice, Zimbabweans were using a multi-currency system dominated by the U.S. dollar after abandoning its own currency in 2009.

Zimbabwe later introduced a local currency called the bond note in 2016 to trade alongside the dollar, the British pound, the South African rand and other currencies. This bond note has now become the Zimbabwe dollar.

Most Zimbabwean businesses and residents do not yet fully grasp the change, as they had been mainly using U.S. dollars to avoid the rapidly devaluing local bond note.

Most traders pegged their prices on the dollar, resulting in prices in local currency changing, as much as several times a day in response to rising black market dollar rates.

With banks experiencing widespread shortages of cash, businesses have been forced to resort to the illegal street market to get foreign currency in order to restock. Zimbabwe's industry has been in the doldrums for more than a decade and the country imports most basic items.

Inflation is close to 98%, according to official figures, the highest since the 2009 collapse of the local currency.

source abc News

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Zimbabwe Dollar Returns, a Decade After It Became Worthless - June 25 2019

Zimbabwe has brought back its own currency, the Zimbabwe dollar, just over a decade after its usefulness was destroyed by hyperinflation.

The central bank said that effective immediately, currencies including the U.S. dollar and the South African rand, in use since 2009, will no longer be accepted as legal tender.
A local quasi currency known as bond notes, which was introduced in 2016 but can’t trade outside the country, and their electronic equivalent, the RTGS dollar, will now be known as the Zimbabwe dollar.

The authorities had abandoned the Zimbabwe dollar after inflation reached an estimated 500 billion percent in 2008, according to the International Monetary Fund. While the country has since used a basket of currencies from the continent and abroad as well as bond notes and the RTGS$, some government departments and agencies have until recently demanded payment in the greenback.

The central bank made it clear in its announcement that money held in foreign-currency accounts will not be affected, but the step will be greeted with alarm and memories of the lives wrecked and pensions and savings lost in 2008. Recollections of what effectively became a barter economy in a country where a suitcase full of bank notes was needed to purchase a pair of jeans will be hard to erase.

The central bank also announced a series of other measures, including raising the rate on its overnight window to 50% from 15%, to buttress the currency.

“Any attempt by the officials to bring a new currency would require confidence,” said Jee-A van der Linde, an economist at NKC African Economics in Paarl, South Africa. “People aren’t sure that there’s something backing the currency. There’s no way that something like this will be maintained. People will not trust the currency. It will promote more off-market activity even more if that’s possible.”

In February, the central bank introduced the RTGS$ and said it and bond notes would no longer be pegged to the U.S. currency. This precipitated a rapid depreciation in both the newly introduced interbank rate and the black-market value. Inflation, at 97.9%, is now at its highest since at least 2008.

This “will worsen the situation,” said Christopher Mugaga, the chief executive officer of the Zimbabwe National Chamber of Commerce. Companies “with real dollars will simply go underground,” he said.

Finance Minister Mthuli Ncube said Monday’s announcement gives the central bank “flexibility” to conduct monetary policy. The authorities in Zimbabwe have previously said the central bank plans to establish a Monetary Policy Committee.

“We can also expect the creation of a monetary policy committee as part of the micro institutions that are going towards
stabilizing the value of the currency,” he said on state television.

source https://www.bloomberg.com/news/articles/2019-06-24/zimbabwe-s-dollar-returns-a-decade-after-it-became-worthless

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Zimbabwean 2 dollar bond notes.jpgZimbabwean bond notes are a form of banknote in circulation in Zimbabwe. Released by the Reserve Bank of Zimbabwe the notes are stated to not be a currency in itself but rather legal tender near money pegged equally against the U.S. dollar. In 2014 prior to the release of bond notes a series of bond coins entered circulation.

In November 2016, backed by a US$200 million African Export-Import Bank loan, the Reserve Bank of Zimbabwe began issuing $2 bond notes. Two months later, US$15 million worth of new five-dollar bond notes were also released. Further plans for $10 and $20 bond notes were ruled out by the Reserve Bank's governor John Mangudya.

The notes were not generally accepted by the Zimbabwean people, so the government tried expanding the electronic money supply and issuing Treasury bills instead.

The bond notes were still in circulation in 2018, although former Finance Minister Tendai Biti said that they should be demonetised, as they were being subject to arbitrage. In the campaigning for the 2018 elections, the bond notes became a political issue, with the MDC Alliance calling for their replacement with 'real cash'.

Despite the notes being notionally pegged to the US dollar, their value, like the former Zimbabwean dollar, has collapsed, with everyday transactions using a rate of $3 in bond notes to 1 US dollar as of January 2019.

In February 2019, the RBZ Governor, announced that the bond notes would be part of the "values" that make up the new currency to be added into the Zimbabwean market, the RTGS dollar along with the bond coins and electronic balances. source https://en.wikipedia.org/wiki/Zimbabwean_bond_notes

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Zimbabwe’s central bank abolished the use of multiple currencies as it tries to curb black-market currency trade that’s contributed to surging inflation.

With immediate effect, the U.S. dollar, South African rand and other foreign currencies will no longer be recognized as legal tender in the southern African nation, the central bank said in an official notice Monday in the capital, Harare.

Zimbabwe's official currency trades at a discount on the

Zimbabwe's official currency trades at a discount on the street

 

 

 

 

 

 

 

 

 

 

 

Key Insights
Zimbabwe’s authorities have been struggling to close the gap between the official and black-market exchange rates since the government effectively devalued its currency, known as the RTGS dollar, in February and allowed it to trade on the interbank market. The RTGS$ was changing hands at about 13 per dollar on the streets on Harare on Monday, while the interbank rate is 6.32.

The central bank’s announcement may help stabilize inflation. Prices in Zimbabwe are rising at the fastest pace since a hyperinflation episode a decade ago, when the rate surged to an estimated 500 billion percent.
President Emmerson Mnangagwa has signaled that the country plans to abandon the multi-currency system introduced in 2009, when it abandoned the Zimbabwe dollar, to underpin efforts to stabilize the economy.

source bloomberg.com

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BREAKING NEWS -DIVINE INTEL UPDATE -JUNE 24TH Beny Wilson> https://vimeo.com/344054871

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BREAKING: RBZ Reintroduces Zim Dollar, Bans Use Of All Foreign Currencies With Effect From 24 June 2019

The Reserve Bank of Zimbabwe has with effect from 24 June 2019, banned the use of foreign currencies as legal tender.



According to Statutory Instrument 142 of 2019, the United states dollar, Botswana Pula and South Africa Rand are no longer legal tender in Zimbabwe.

Part of the SI reads:

Subject to section3, with effect from 24th June 2019, the British pound, United States dollars, South African rand, Botswana pula and any other foreign currency whatsoever shall no longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe.  source

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6 Military Trucks Drove Into Harare Carrying Cargo Marked “Abnormal,” And Within 48 Hrs, Mnangagwa Today Announces Zim Dollar’s Back. Video Link

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