Friday, July 12, 2024

Zimbabwe’s new currency loses value by 20%

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Isaac Kaledzi
Isaac Kaledzi
Isaac Kaledzi is an experienced and award winning journalist from Ghana. He has worked for several media brands both in Ghana and on the International scene. Isaac Kaledzi is currently serving as an African Correspondent for DW.

In February this year, Zimbabwe introduced a new currency called the RTGS, or Real-Time Gross Settlement dollar.

The new currency was meant to deal with the country’s worsening economic situation and restore some stability.

The country prior to that used the U.S. dollar as its national currency but the currency was in short supply.

The shortage plunged the country’s financial system into chaos leading to closure of some businesses and unrests.

When the RTGS was introduced, on February 22, the exchange rate was RTGS $2.50 for every US $1.

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But the value of the RTGS dollar is fast losing value. Fin24 reports that by Friday the RTGS dollar weakened to RTGS$ 3.0120 against the US dollar.

That is a 20% drop in value since introduction, a signal that introducing a new currency might not be the magic in stabilizing Zimbabwe’s economy.

In February, Zimbabwe’s Finance and Economic Development Minister Mthuli Ncube told a gathering that “We have introduced the RTGS dollar.

Citizens have to accept the introduction of the RTGS dollar. Whether you like the name or not, it is the domestic currency now – let’s respect it and support it.”

The Reserve Bank of Zimbabwe had announced that all local transactions must be settled in RTGS dollars.

“The RTGS dollars shall be used by all entities (including government) and individuals in Zimbabwe for the purposes of pricing of goods and services, record debts, accounting and settlement of domestic transactions,” the bank said.

But not all businesses especially in the informal sector are complying with some still displaying prices in both RTGS dollars and US dollars.





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