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Archive for the tag “Zimbabwe Reserve Bank”

Opinion: RTGS Dollars are Bond-Notes on steroids!

Today on the 20th February, the Governor John Mangudya of Zimbabwe Reserve Bank have launched a new currency in the Republic. This is the second time within the amount of three years, that the Zimbabwe African National Union – Patriotic Front (ZANU-PF) have launched a currency.

Because on the 26 November 2016, the same authorities launched the Bond-Notes. As that currency been struggling ever since. As the promise of 1:1 Forex Exchange between the Bond-Notes and US. Dollars. However, that haven’t been the issue, as the Bond-Notes been weaker than that. Significantly weaker, but the authorities have played around like it has the same value.

The RBZ have launched the RTGS Dollars, which are fully named Real-Time Gross Settlement Dollars. In all means of the name is real long name for a currency. Even the RTGS Dollars sounds like insignificant transaction. Because, the RTGS is like a crypto currency, a digital one, where the amount of RTGS Balances + Bond-Notes = RTGS Dollars.

Therefore, the RTGS is based on the liquidity of RTGS Balances, which means the Mobile Money Transactions plus the Bond-Notes. That is showing the lack of value in the currency before even starting.

What is showing the nightmare of the whole Bond-Notes of 2016 is relaunched today in 2018. It is just repacked and they hope this will maintain stability of the exchange rate. However, it is now the whole multi-currency system in a boiling pot and they hope it becomes a tasty stew, by blending in a new feature. Which seemingly is built on a transactions system, instead of a assets and liquidity built into a stable financial market. As the currency is supposed to be trusted and be a state instrument for transactions. Instead, here it is built on shaky grounds and just awaiting to sink.

The governor of the bank has in 2017 called the economy an albatross. Certainly with the RTGS Dollars, that is not changing. As the unfortunate ideas continues arising and they think these will solve the lack of foreign exchange and the lack of input into the system. However, they are not thinking straight and unlocking new scary scenarios. As they are now trying to shield the Bond-Notes, get them into the digital transactions of the RTGS Dollars, which would hopefully get more funds into the system. It might infuse more funds, as these are returning and become taxed by the RTGS taxes. That is surely securing the values and lack of trust in the Bond-Notes, which now will be transferred to the RTGS combined with the RTGS Dollars. That later can be changed again into the US Dollars. That shows the weakness of the whole system. Just like it was with the Bond-Notes alone.

The RTGS Dollars will be devastating as the launch of Bond-Notes. This is just another storm in a glass. Now, the state and republic can just await another hurdle. The RTGS Dollars will be as hectic or maybe even more than Bond-Notes. Even if people are familiar, the reality is that US Dollars have been the saving grace and even civil servants wanted their salaries paid in that.

Therefore, the current future is the new digital currency, the RTGS Dollars will be a rocky road. How it will be? Who knows? But the launch of Bond-Notes was a mess, this will surely be no different… Peace.

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Zimbabwe: ZERA – Press Statement on Artificial Fuel Supply Shortage (18.10.2018)

Zimbabwe: Press Statement by the Hon. Minister of Energy and Power Development – Dr. J. Gumbo on the use of Containers in Buying Fuel (17.10.2018)

Zimbabwe: A messed up Gumbo, a possible need for an authorization to use jerrycans for fuel!

Those using tanks, drums and jerry cans all, those forms of containers should stop and we are sending out inspectors and the Zimbabwe Republic Police and if anybody is going to be found maybe overcharging or using drums might have their licences withdrawn. We are not going to allow that…” – The Minister for Energy and Power Development Joram Gumbo (Maveriq – ‘Govt To Ban Jerry Cans, Drums, Fuel Containers At Service Stations – Energy Minister’ 16.10.2018, link: https://news.pindula.co.zw/2018/10/16/govt-to-ban-jerry-cans-drums-fuel-containers-at-service-stations-energy-minister/).

I thought the Zimbabwe African National Union – Patriotic Front (Zanu-PF) and the new President Emmerson Mnangagwa would open the Republic for business. Mnangagwa is clearly out on the line. The government have issued new taxes and the costs of everything has gone up. As well as the lack of foreign exchange is now rampant.

Since the added taxes on Mobile Money was enacted, the lack of US dollars and the imports of products have gotten worse. Even shops are lacking stocks and people were stockpiling before the shops gotten empty. With this has also started a fuel crisis. Where people are waiting in line for hours for fuel.

As this is getting worse now. The Minister for Energy Gumbo has issued statements of intent of authorization of usage of jerry cans, where you need to be Authorised and stamped by Environmental Management Agency, the District Administrator and Police Regulating Authority. Where the person who is allowed to bring a jerry can, has to write which station in question and address, also drivers license information and even how many liters of fuel is allowed to fill.

The Zanu-PF is really now making life harder, as the people using motorcycles, cars and lorries have to ask permission to fill fuel into jerry cans. This is done in 2018. If you thought things was bad during Mugabe. The rising inflation and the economic crisis of 2008 might be repeated. As the state is going even further with using tactics to stall the issue.

If the state is really doing this, they will be in a special state. Where the citizens are running between the authorities to get authority to use the jerry cans before going to the Petroleum-Station to get a refill of fuel.

This is a sign of how serious the lack of fuel is and what extent the state does to stop the usage of fuel. They wouldn’t do it, if they didn’t have issues with importing it and having enough foreign currency to afford new imports.

This crisis is created by the Zanu-PF and the citizens are paying. And they are making the matters worse. Instead of repealing the taxes to stop inflation and making things run out. They are instead making it harder for the public to get fuel in their vehicle. Peace.

MISA Zimbabwe: Private Media barred from covering Commission of Inquiry Hearing (16.10.2018)

Zimbabwe: The statement as given by Hon Monica Mutsvangwa (15.10.2018)

The Pharmaceutical Society of Zimbabwe: Statement on the Medicine Shortages and Price Distortions (12.10.2018)

Report on the Zimbabwe’s Re-Engagement with Co-Operating Partners on the Arrears Clearance Road Map Bali, Indonesia: 10 October 2018

President Emmerson Mnangagwa: Press Release on the Need for Economic and Currency Reforms (10.10.2018)

Zimbabwe: Announcing the Launch of the Citizens’ Cabinet (10.10.2018)

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