Zimbabweans queue outside banks as new currency begins trading

By Mike Hutchings

Queues formed outside banks in the Zimbabwean capital Harare on Friday as the central bank opened trading of a new currency, a Reuters witness said.

Zimbabwe’s central bank announced on Wednesday that it would scrap the peg between its quasi-currency bond note and the US dollar, creating a new currency from the bond notes and notional electronic dollars that will be known as RTGS dollars.

The central bank sold banks US dollars at a rate of 2.5 RTGS dollars on Friday morning, governor John Mangudya said.

Zimbabwe’s central bank on Wednesday said it was introducing a new interbank foreign exchange system, effectively devaluing its quasi-currency which had been officially pegged at par with the US dollar.

“We have provided a formal way of trading in foreign currency,” Mangudya said as he announced new monetary policy measures aimed at addressing a perennial foreign currency crunch.

“We have basically formalised what is happening. We have basically ensured that no one goes to buy currency from the parallel market.

“The inter-bank exchange system will have significant positive effects on the economy’s external and fiscal sectors, domestic production and on the welfare of citizens,” he said.

Reuters and AFP