RTGS$ will plunge more

RTGS$ will plunge more
Published: 18 June 2019 (386 Views)
LACK of production in the country will cause the RTGS dollar to further plunge as it loses ground against the sturdy US dollar, former Finance minister Tendai Biti has said.

This comes after the RTGS has continued to plummet against the US dollar, fetching around 920 percent on the black currency market and 600 percent on the interbank market.

"In August 2019, the RTGS dollar will trade 15:1 to the US dollar. There is no production yet consumption levels are huge," wrote the outspoken legislator on his twitter handle.
"To therefore claim that Zimbabwe has strongest currency in the region is both zany and unscientific.

"Those who have authored this crisis should simply zip their cartel mouths.

"The sooner the cartels, muppets and mafia mis-running this country understand this the better," Biti added.
This also comes after President Emmerson Mnangagwa last week said the bond note is the strongest currency in the Sadc region

Meanwhile, the plunging of the local currency has rendered wages worthless, leaving the country's professionals being recorded as some of the least-paid in the world resulting in several Zimbabweans living below the poverty datum line (PDL).
The lowest paid civil servant gets as little as RTGS$600  which is about US$100 on the interbank market and a meagre US$67 on the black currency market.

As a solution to stabilise the skyrocketing prices and disparity between wages and cost of living as well as get rid of the black market which has been causing currency distortions, Mnangagwa also said the southern African country would introduce a new currency by year end.

In response, economist John Robertson told the Daily News that any kind of sustainability of a new local currency and economic reforms are also dependent upon reviving production in the country.

"Sustainability would also depend upon many more local producers getting back to work to overcome the need for so many imports.

"But, for these producers to have a better chance of success, government would have to remove all the permit and licence requirements that presently make imports cheaper than locally produced products," he said.

Zimbabwe currently has a negative trade balance, where imports have perpetually over arched exports due to lack of production.
Commercial farmers fail to access affordable finances, amid the weakening viability of commercial farming in the country.

"Sustainability should start with farming, as improved farm output would help many manufacturers take up opportunities to restart factories.

"To get the farmers back to work, access to bank finance would be essential.

"If Zimbabwe restores food security and rebuilds its agricultural export revenues, if it rebuilds the investment foundations needed by manufacturers and if it makes the needed progress in settling its debts, it will have no difficulty introducing a currency worthy of respect," added Robertson.

- dailynews

Tags: RTGS,
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