Ncube moves to calm restive markets as economy plunges into crisis

Finance minister Mthuli Ncube moved to calm the markets Wednesday, saying the value of the bond note and the Real Time Gross Settlement (RTGs) is still at par with the US dollar.
His comments come at a time forex dealers on the streets are now paying $350 for every $100 or a rate of $1:3.50 against the central bank’s $ 1:1.
Zimbabwe, which adopted a multi currency system in 2009 after a runaway inflation, will maintain the currency system until specific ‘fundamentals’ are achieved.
“Government recognizes concerns surrounding RTGS deposits, and we commit to preserve the value of these balances on the current rate of exchange of 1 to 1, in order to protect people’s savings,” said Minister Ncube in statement.
“In view of the need for an orderly currency reform programme that will be followed when the economic fundamentals are right to do, the country shall continue to use the multi-currency system which was put in place by Government in 2009.
“This system entails that foreign exchange earners are not prejudiced of their regulatory foreign exchange receipts and that those who do not earn foreign exchange have access to foreign exchange through the banking system as per the current policy of foreign exchange management system. In parallel, the Reserve Bank shall continue to maintain adequate resources for the import of essential commodities.”
Treasury added that it is also reinforcing Nostro foreign currency accounts with a statutory instrument (SI) to guarantee that these are private deposits, and neither the Reserve Bank nor Government can have access to them.
Ncube two weeks ago said corporates and individuals must open FCA accounts with banks, a statement many construed to imply that the current bank accounts were no longer denominated in US dollars.
This immediately sent shock waves into the market as the rate of the bond notes and RTGs balances suffered against the US as investors revalued the currency according.
The Zimbabwe Stock Exchange yesterday breached a historic record to close at a market value of $16.7 bn. Prices of goods have since gone up in line with weakening local currency.