Economy

Zimbabwe delays start of dollar trading to foolproof systems

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Zimbabwe scrapped its own currency a decade ago to end hyperinflation and adopted a basket of units instead, with the dollar being the most widely used.

Wednesday 06, February 2019

(Bloomberg) --Zimbabwe delayed plans to allow companies and individuals to transfer dollars electronically as it tests systems to ensure they’re infallible, a central bank official said.

The postponement will exacerbate a dearth of cash in the southern African country that is prevented beer and bread manufacturers from buying raw materials, and led to shortages of food and fuel.

Trading may go live after the central bank has issued its monetary policy statement around mid-February, the official said by phone Tuesday from the capital, Harare.

“The system is not yet live, but we will see how it goes by the time of the monetary policy statement,” the official said. Tests are continuing to ensure “everything is foolproof,” he said.

The Confederation of Zimbabwe Industries earlier this month said the government should allow banks to trade dollars in a bid to halt the economic collapse, which has seen the official inflation rate surge to 42 per cent.

The central bank had said on 29 January it planned to test the system until 1 February, before going live.

The central bank then printed quasi-greenbacks called bond notes and an electronic currency known as RTGS$ to fund rampant government spending. that is resulted in a convoluted system of exchange rates, with consumers charged different prices depending on how they pay.

 

TAGS : Confederation of Zimbabwe Industries, Reserve Bank of Zimbabwe, RTGS$, bond notes

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