Zimbabwe's currency has lost 82% of its value since February

[yota691]

Zimbabwe returns to use its own currency and prevents dollar trading

 24 June 2019 08:34 PM
From: Ahmed Shawky

Mubasher : Zimbabwe has restored its local currency, the "Zimbabwe dollar" again, after more than a decade to cancel it due to hyperinflation.

"The local currency is in effect immediately," he said in a statement on Monday. "The currencies including the US dollar and South African Rand, which have been used since 2009, will not be accepted."

The African nation had abandoned the Zimbabwe dollar after inflation reached 500 billion percent in 2008, according to the International Monetary Fund.

While Zimbabwe has since used a range of currencies from the continent and abroad, as well as issuing a currency from Bond Note and electronic funds in the name of RTSH $, some government departments and agencies have recently requested payment in US currency.

The central bank also announced a series of other measures, including raising the interest rate to 50 percent from 15 percent.

A 90-day restriction was also placed on the disposal of securities or dual listed shares purchased by investors on the Zimbabwe Stock Exchange.

 

[pokerplayer]

Thxs yota. I'm sure glad I don't have any of those colored pieces of paper.

 

  pp

[markb57]

wait, is the old zim or the new zim......🙄

[GregHi]

So what about those of us who have one hundred trillion dollar notes? LOL somehow I doubt that rate is 1:1... 😜 

[yota691]

Zim's dollar returns, a decade after it became worthless

Jun 24 2019 20:08 

Antony Sguazzin

 

Zimbabwe outages plunge businesses into darkness

Zimbabwean President Emmerson Mnangagwa promised a ''brighter tomorrow'' when he was sworn in, vowing to revive the country's economy after Robert Mugabe's 37-year rule. But this week Zimbabwe is firmly in the dark, as it endures the worst power cuts in three years.

A protester opposed to the introduction of bond notes burns a Zim dollar note. (Memory Mataranyika) 

 

Zimbabwe has brought back its own currency, the Zimbabwe dollar, just over a decade after its usefulness was destroyed by hyperinflation.

In regulations published Monday by the Reserve Bank of Zimbabwe the country said that currencies including the US dollar and the South African rand, in use since 2009, will no longer be accepted as legal tender. A local quasi currency, bond notes, that was introduced in 2016 but can’t trade outside the country, and their electronic equivalent, the RTGS dollar, will now be known as the Zimbabwe dollar.

Zimbabwe abandoned the Zimbabwe dollar after inflation reached an estimated 500 billion percent in 2008, according to the International Monetary Fund. While the country has since used a basket of currencies from the continent and abroad as well as bond notes and the RTGS$, some government departments and agencies have until recently demanded payment in the greenback.

The central bank made it clear in its announcement that money held in foreign-currency accounts will not be affected, but the step will be greeted with alarm and memories of the lives wrecked and pensions and savings lost in 2008. Recollections of what effectively became a barter economy in a country where a suitcase full of bank notes was needed to purchase a pair of jeans will be hard to erase.

 

“Any attempt by the officials to bring a new currency would require confidence,” said Jee-A van der Linde, an economist at NKC African Economics in Paarl, South Africa. “People aren’t sure that there’s something backing the currency. There’s no way that something like this will be maintained. People will not trust the currency. It will promote more off-market activity even more if that’s possible.”

Zimbabwe's official currency trades at a discount on the street. In February the central bank introduced the RTGS$ and said it and bond notes would no longer be pegged to the US currency. This precipitated a rapid depreciation in both the newly introduced interbank rate and the black-market value. Inflation, at 97.9%, is now at its highest since at least 2008.

This “will worsen the situation,” said Christopher Mugaga, the chief executive officer of the Zimbabwe National Chamber of Commerce. Companies “with real dollars will simply go underground,” he said.

--With assistance from Godfrey Marawanyika.

[yota691]

Between the abolition of the currency and its return .. 10 years of suffering Zimbabwe

30 Jun 2019 03:49 PM
From: Sally Ismail

Mubasher: With the crisis of hyperinflation in Zimbabwe a decade ago was the abolition of the local currency is the solution, but returned today again, the question remains; does this mean the return of the economy to normal and even the lives of citizens as well?

Between the cancellation and the return of the currency, it took about 10 years, during which the African nation floundered in the use of foreign currencies led by the US dollar and South African Rand in addition to attempts to deal with alternative currencies, the last of which was a few days ago.

After years of the suspension of the use of the Zimbabwe dollar, Zimbabwe 's Reserve Bankannounced in a statement posted on its official website Monday (June 24th) that the local currency was in effect immediately.

The Central Bank of Zimbabwe has decided that other foreign currencies will not be accepted from within the African continent, with the country's interest rate increasing to 50 percent instead of 15 percent.

With a little back in the past, Zimbabwe's inflation accelerated to 500 billion percent in 2008, and was the largest banknote issued in the amount of 100 trillion Zimbabwe dollars; the result was then President Robert Mugabe the next year to cancel the local currency Zimbabwe) and replaced by a basket of foreign currencies.

But with a sharp crisis in the supply of the US dollar pushed prices to take an upward trend again, the government decided to issue digital currencies in 2016 known as "Bond Note" equivalent to the value of the US currency, but this did not last long with the circulation on the black market ).

By November 2017, Mugabe had been isolated from the hopes of ending the state of economic decline that the African nation had reached during his 30-year tenure.

A few weeks later, Emerson Mananguagua was elected president but the economy showed no sign of recovery as the currency crisis continued, despite promises he made when he won the presidential election.

In early January this year, the Zimbabwean government pledged to introduce a new currency within the next 12 months.

By February, the central bank had decided to get rid of the "currency notes" at the request of the Minister of Finance, "Mtoley Nkubi" and the launch of another new unit that integrates all electronic currencies, called the Real Time Gross Settlement or RTGS Dollar "and be equivalent to the value of the US dollar.

But this new currency lost about 69 percent of its value in the current quarter, according to data compiled by Bloomberg.

None of this should be surprising. When people lose their lives and plunge into poverty without any fault on their part, the last thing they want to do is rely on the government that was the cause, according to the Project Syndicate report.

Because of the continuing lack of consumer and corporate confidence in the state-run monetary system, the new dollar (the current total settlement dollar) lost about a fifth of its value within a month of its introduction, the report said.

Harare's economy is chaotic, with almost everything imported from abroad with a severe shortage of cash and a high cost of living as unemployment spreads.

According to the latest data from the International Monetary Fund, the South African country's economy grew by 4.7 percent in 2017 after contracting by 17.67 percent in 2008.

 

Zimbabwe's inflation rate was 42.1 percent in December last year, according to the National Statistics Agency of Zimbabwe.

But the consumer price index is currently hovering around 100 percent after rising 97.85 percent last month, which means inflation is accelerating enough to create pain for both workers and businesses inside the country, as well as raising concerns about the return of the decade of hyperinflation a decade ago.

Before the last step on the return to the Zimbabwe dollar, Asia Global's 2018 Asia Global analyst George Luanda presented an analytical view of Project Syndicate as a possible solution to the Zimbabwe crisis.

Luanda believes that the digital currency will circumvent the crisis of mistrust among Zimbabwean citizens, as the government has a long history of poor financial management and its inability to afford the cost of printing more banknotes.

A real currency would not enable a country with a population of about 16 million to overcome its ongoing currency crisis due to lack of government credibility, but the best way to revive Zimbabwe's economic growth is to abandon a government-run monetary system.

Commenting on the return to the Zimbabwe dollar, the country's new president says the ban on foreign exchange has been important to restoring the normalcy of our economy.

The multi-currency system contributed to the stability of the economy but did not give Zimbabwe the ability to control monetary policy and made it at the mercy of the US dollar, which was a major cause of inflation.

While a member of the opposition Movement for Democratic Change (MDC) in Zimbabwe described the move to officially convert Zimbabwe's "RTS" to the Zimbabwean dollar as "total madness."

"The market is re-aligning the currency with the US dollar because of the loss of confidence in RTS," says David Coulthart, a tweet on his official account on Twitter.

"You can not force people to love a coin," he said. "This will exacerbate the current chaos."

 

The US dollar is equivalent to 11 Zimbabwe dollars on the black market compared with the official rate of 6.2 Zimbabwe dollars, citing a report published by the BBC.

In contrast, Zimbabwe's trade unions conference - the country's largest labor body - threatens collective action unless the government backs down its policy of switching to the use of "RGS $" as the country's single currency.

The president of the conference, "Peter Motasa," called on the government to reverse this destructive policy immediately and announce the payment of workers' salaries in US dollars.

 

[yota691]

Zimbabwe's currency has lost 82% of its value since February

 18 September 2019 01:14 PM
Direct: The currency of Zimbabwe has witnessed strong losses recently despite the measures taken by the government and the central bank to cope with the decline, which reached 82 percent since February.

The Zimbabwe dollar fell from 2.50 to 13.52 per US dollar, equivalent to a loss of 82 percent and makes it the worst performer in the world, after Venezuela, which faces hyperinflation, according to Bloomberg.

The losses came from last February, when the government decided to launch a new currency "RTS GS" that would be equivalent to the US dollar.

But in June, the Zimbabwean government decided to revert its currency to the Zimbabwe dollar and ban the use of foreign currency after it was abandoned in 2009 to counter hyperinflation.

To cope with continued currency losses and curb inflation, Zimbabwe's central bank decided to raise interest rates by 20 percent to 70 percent, the largest in the world after Argentina.

That may not do much for consumption in an economy the International Monetary Fund says will shrink 2.1 percent this year, but Zimbabwean officials believe it is necessary to slow inflation.

Zimbabwe is suffering from 230 to 570 percent inflation, according to analysts' estimates. Official data have not been released since February.