The monetary policy statement announced on the 20th February 2019 left more questions than answers. So here we tackle those questions.

What is RTGS Dollar?

Put simply the RTGS dollar is the group name that has been given to bond notes, coins and existing electronic balances in the system.

Is it the same as the Zim dollar?

In essence it is. It will be fully recognised as a currency.

What happens to the money in my bank account and Ecocash?

That money automatically becomes RTGS$ unless the money was specifically in NOSTRO foreign currency accounts which were introduced in October 2018.

What’s the rate of RTGS to USD?

Trading will start Friday. The reserve bank governor believes the rate will play somewhere between 3-4 to the US$, placing it close to the parallel market rate.

Will salaries increase?

Unlikely since it will cause inflationary pressure & we are already receiving RTGS salaries.

What about debt, will they be repaid using exchange rate?

Unclear, subject to court actions. However, since we were already using RTGS Dollars informally, debts will be payable in RTGS dollars without exchange rate. The government is expected to make a law to make this so.

If I walk in a bank and want to import an ex-Jap vehicle/forex for personal needs, can I just buy USD over the counter?

No, you cannot. The government has authorized Banks to provide forex for the payment of bonafide business foreign payment invoices except school fees.

What if I walk to a Bureaux de change?

Their sales of forex are bound by rules that allow small payments for foreign subscription services, business & personal travel and limited per day to US$10 000 per bureau, so it’s unlikely you will easily access it. The limit is too low to provide sufficient forex to individuals and small businesses.

If I have USD, can I easily sell them?

Yes, Bureaux de change are authorized to purchase unlimited amounts of forex.

Will the black-market die?

No, but demand may decrease since corporates can get money from Interbank Forex market. Individuals and informal traders are expected to continue buying forex from black market.

Will prices increase?

Basic commodities are still being subsided via the letters of credit facilities and/or the Foreign Exchange Allocations
(essential commodities that include, fuel, cooking oil, electricity, medicines and water chemicals) . For other goods it will depend on how the market reacts via the exchange rate.

Will this work?

It is expected to force the exchange rate downwards but alone it may not be enough to move the market. Time will tell.

Where will the government get forex for the inter-bank exchange?

Individuals who want to sell forex. In addition to those, exporters forex surrender ratios have been maintained and some adjusted upwards. Also, by forcing exporters to exchange their banked forex for RTGS Dollars on a 30 day ‘use it or lose it’ basis.

Will pension be converted from USD?

All local investments and pensions are assumed to be in RTGS Dollars, so no conversion necessary.

What about share values?

These are also assumed to already be RTGS$.

What about mortgages?

No change, assumed to be RTGS already

Will cash shortages end now?

The Governor didn’t address this issue, but he indicated he preferred the current cashless status quo. Also printing more money may lead to inflationary pressure and depreciation of RTGS Dollars.

Will duty on cars and other imports be paid in RTGS$ now?

The Finance minister has authority over this and while no position has been expressed yet it’s reasonable to believe forex duty will remain.