Zim's new currency has shed 20% since introduction

Zimbabwe's local currency, the RTGS dollar, has shed more than 20% of its value since its introduction as the availability of foreign currency on the formal market remains subdued.

By Friday the RTGS dollar had weakened to RTGS$ 3.0120 against the US dollar, a 20% drop.

Analysts attribute the continued slide of the local currency to the limited availability of foreign currency on the formal market, with export earners expecting it to weaken further. 


"There is a feeling in the market that the formal market rate is being managed by the central bank, so export earners are reluctant to sell. But now that the rate has weakened further, we expect the market to be liquid going forward,"said Walter Mandeya of Trigrams Investments.

Late in February, Zimbabwe introduced a new currency called the RTGS, or real-time gross settlement dollar, in the process abandoning its long-held 1:1 parity between the US dollar and its local transactional instrument - the bond note.

The introduction of the new currency was also accompanied by the introduction of a market-based foreign exchange market, where the value of the local currency against other global currencies would be determined by market forces, through what is called an interbank market.

At the start, the Reserve Bank of Zimbabwe put an official rate of RTGS$2.5:US$1. This has since devalued to current levels.

The official exchange rate is however 40% lower than what is prevailing on the parallel market, where the RTGS dollar is trading at 4.2 times the greenback. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.34
(-0.46)
ZAR/GBP
21.24
(-0.04)
ZAR/EUR
18.29
(+0.01)
ZAR/AUD
11.79
(+0.01)
ZAR/JPY
0.14
(-0.15)
Gold
1698.59
(+0.28)
Silver
25.20
(-0.29)
Platinum
1126.00
(+0.85)
Brent Crude
67.21
(+4.17)
Palladium
2331.73
(+0.81)
All Share
68271.19
(+0.78)
Top 40
62788.64
(+0.87)
Financial 15
12759.80
(+0.67)
Industrial 25
87613.31
(-0.32)
Resource 10
70801.78
(+2.36)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 1060 votes
No, I did not.
52% - 2666 votes
My landlord refused
28% - 1441 votes
Vote