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Robertson: RBZ's Broken Promises Responsible For Self-redollarisation

4 years agoSun, 22 Dec 2019 18:06:19 GMT
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Robertson: RBZ's Broken Promises Responsible For Self-redollarisation

An economic analyst, John Robertson, said Zimbabwe’s fiscal and monetary authorities’ failure to keep promises they made in February has led to the self-redollarisation of the economy.

Robertson asserted that if the promises had been kept, the exchange rate would have stabilised at 1:6. He said:

Promises were made before February 28, 2019, from which date market forces were supposed to determine the Zimbabwe dollar exchange rate.

If these promises had been kept, the rate might have become stable at about Z$6 to the US dollar. But the promises were not kept, and the imbalance remained.

People with special privileges were also able to continue making profits by selling US dollars for more than they paid for them, and prospects of building trust were severely damaged.

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In February this year Reserve Bank of Zimbabwe governor John Mangudya announced the introduction of a new currency called RTGS dollars.

The currency consisted of existing RTGS balances in bank accounts, Bond Notes cash and Bond Coins and the initial exchange rate with the US dollar was pegged at 2.5 RTGS dollars/US dollar.

More: Daily News

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