Correspondent|FINANCE and Economic Development Minister Professor Mthuli Ncube ha sannounced that Zimbabwe wil have a “fully-fledged currency” within the next twelve (12) months.
Mthuli Ncube, who is in Washington DC, the United States (US), for the International Monetary Fund and World Bank 2019 Spring Meetings, said this in an interview with Bloomberg Television on Thursday.
He also said Zimbabwe will “soon” introduce a central bank reference rate as part of measures the government wants to use to prop up the collapsing economy .
He told Bloomberg that: “Zimbabwe plans to introduce a new, fully fledged currency in the next 12 months and to close the gap between the rate for dollars in the official and parallel markets using RTGS dollars, which the government introduced in February.”
The report by Bloomberg continues: “The measures come as the government scrambles to end a currency shortage that’s pushed inflation to the highest rate since 2008 and sparked shortages of fuel and bread.
“The troubles stem from the country abandoning the Zimbabwe dollar in 2009, after a bout of hyperinflation, in favor of the greenback. In 2016, it introduced the bond notes, which aren’t accepted outside the country, to fund rampant spending.
“The annual inflation rate is at its highest since a hyperinflation episode in 2008, but month-on-month price growth slowed to 1.7 percent in February from 10.8 percent a month earlier.”
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.