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Home Tech Biti Was Right, Zimbabwe Has A New Currency
Tech
February 21, 2019

Biti Was Right, Zimbabwe Has A New Currency

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Yesterday’s Monetary Policy Statement vindicated former Finance Minister, Tendai Biti who last week had disclosed that Zimbabwe was going to introduce a new currency. Indeed, Mr. Biti was right Zimbabwe has essentially introduced a new currency.

The redenomination of bond notes, coins, and RTGS balances to RTGS dollars technically (but not officially) means that Zimbabwe now has a new currency. Despite the Reserve Bank of Zimbabwe shying away from saying the RTGS dollars are a new currency, they are characteristically a new Zimbabwean currency as they are no longer tied to the value of the US Dollars and they can be formally exchanged with other currencies at a market-determined rate.

Therefore, abandoning the 1:1 pegging between RTGS Dollars and US dollars is the act that has proved that RTGS dollars are in themselves a stand-alone currency. The exchange rate between the RTGS dollars and the US Dollar will start at between 3-4 RTGS dollars/$1 US dollar.

When Mr. Biti made his claim, the Reserve Bank of Zimbabwe was quick to dismiss it by saying that Zimbabwe will “continue to use the multicurrency system”. Yes, we are still using the multicurrency system but Zim dollar has now been introduced into the multicurrency system.  And apparently, with reference to Mr. Biti’s statements, this new currency (RTGS dollars) is “not backed by any reserves” or structural reforms which are “prerequisite to currency reforms”.

Also Read: Here Are The Answers To All Your Questions About The RTGS Dollars

Tendai BitiRTGS DollarsBond Notes

Tendai Laxton Biti is the president of the People’s Democratic Party, a prominent lawyer, activist, politician and Member of Parliament for Harare East. Biti was part of the founding team of the Movement for Democratic Change in 1999 together with Morgan Tsvangirai, Gibson Sibanda, Welshman… Read More About Tendai Biti

Zimbabwe RTGS Dollars are a Zimbabwean currency introduced on 20 February 2019 by the Reserve Bank of Zimbabwe. At introduction, the currency consisted of existing RTGS balances in bank accounts, Bond Notes cash and Bond Coins. The introduction of the RTGS Dollars was announced by… Read More About RTGS Dollars

Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were… Read More About Bond Notes

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