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ZimBollar Research Institute
@ZimBollar
, 31 tweets, 9 min read Read on Twitter
We will using the hashtag #MPS2019 for updates on the RBZ Monetary Policy Statement.
RBZ Governor arrives

#MPS2019
Governor takes the the podium to deliver #MPS2019
Mangudya tenders apologies on behalf of @MthuliNcube and @GGuvamatanga who are on Gvt Business in Zambia

#MPS2019
Mangudya acknowledges serious downturn in the economy and the negative pass through effects of forex rates on the alt market.

#MPS2019
Three Tier Pricing policy now prevalent in light of Forex Rates

#MPS2019
Export Incentive scheme has been eroded by alternative market rates.

#MPS2019
It is now imperative to introduce a mechanism to price forex and the policy will establish a domestic Interbank forex market

#MPS2019
Measures in the MPS will restore export competitiveness

#MPS2019
Measures

1) Establish Interbank forex market

This will formalise the trading of forex v RTGS and Bond on a willing buyer willing seller
RTGS Dollars(RTGS, Bond, Coins) are now called RTGS Dollars and is now local unit of account(currency)!

Retailers to maintain prices at current levels!

#MPS2019
RBZ will est various lines of credits to defend the exchange rate!

#MPS2019
All foreign liabilities currently contracted willbe treated as forex

ie: dividends etc

#MPS2019
Banks to formally report all foreign currency activity to the RBZ on a daily basis (2hrs in the first two weeks)

#MPS2019
Export retention

Gold- 55%
Manufacturing- 80%
Tobacco merchants - 80%
Tobacco growers- 30%

Retentions to be used within 30 days

#MPS2019
All inward remitances will be treated as free funds

#MPS2019
Nostro FCA Settlement platform estanlished

#MPS2019
RBZ to introduce inflationary targeting to anchor macro economic stability

#MPS2019
IFRS 9

Banks expected to comply by March 2019

#MPS2019
MasterCard and Visa providers to migrate to EMV technology. All cards to be EMV complaint by 31 March 2019

#MPS2019
Governor predicts that the InterBank forex market will drive the market towards stability and steer the country in the right direction.

#MPS2019
Presentation ends!

#MPS2019
Question Time

#MPS2019
Prof Ashok Chakravaat congratulates the Governor for a "brave move"

#MPS2019
Dr Anthony Mandiwanza

He asks whether this Monetary Policy has he full support of Fiscal policy

#MPS2019
Pepukai Chiore

How does this policy align to existing statute on Bond V USD (1:1)
#MPS2019
Governor answers

The RBZ is taking these measures to restore value for money.

In Zim the best way to manage inflation is to ensure a stable exchange rate.

#MPS2019
Governor expects the rate to go below current levels of 3.5 and 4. If it rises betond this level he says there wont be sufficient demand to support any business

#MPS2019
5% export incentive is now useless when inflation rate is at 56%- Manyudya

#MPS2019
In short we have given the country a formal way of trading in forex instead of the parallel market- Mangudya

#MPS2019
Banks Capitalisation will remain at $100m (RTGS Dollars)

#MPS2019
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Related hashtags

#MPS2019

More from @ZimBollar see all

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ZimBollar Research Institute
@ZimBollar
Quick Thoughts on #MPS2019

We are glad to say today's MPS announcement is consistent with 38% of the audience that casted votes under our last poll. Despite the majority preferring to adopt the Rand, the Rand was never going to be an option considering....(contd)
... the absence of the necessary prerequisites like 1) Acceptable Inflation target 2) Acceptable Debt/GDP ratio 3) Adherence to prudent fiscal measures 4) Own currency. So if the Governor was to go by the people's wishes he had to go by the Second best option- Floating the RTGS!
In our considered view, it is likely the rate will maintain at current levels considering there will be a significant supply of forex from the major exporters. Prices shld also remain at same levels since they were already factored in the rate
Read 4 tweets
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ZimBollar Research Institute (Pvt) Ltd
@ZimBollar
THREAD ON FUEL CRISIS

1) Fuel is a baseline expense and any increase on fuel pump prices unlocks a spat of prices for other commodities. Chances are in the coming wks we will witness massive prices increases, panick buying, hoarding and the usual things associated with inflation
2) The best way in our view was to peg fuel in forex and hence allowing businesses to follow suit and charge thier commodities in forex. This wld have systematically eliminated the bond notes/RTGS as the USD is more attractive from a stability point of view.
3) One wld ask: Where do people get the USDollars when salaries are in Bond/RTGS? Ans: Dollarising will allow circulation of the few dollars we have, gvt will collect revenue in USD, pay civil servants in USD n the USD prices will be more competitive than we witness on Bond/RTGS
Read 5 tweets
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ZimBollar Research Institute (Pvt) Ltd
@ZimBollar
ZimDollar Scenario on replay

1) It would help for people to relate the actual chronology of the permanent fall of the ZimDollar in late 2008, early 2009. With the $100 Trillion Note coming in, Retailers started to benchmark prices at rates higher than the going USD/ZWD rate
2) The same is being witnessed in today's environment as retailers seem to be pegging Bond ¢ RTGS prices higher than the generally agreed Alternative Market rate. This is wisely designed to force people to Buy in USD. The brave retailers are pegging prices exclusively in USD.
3)The scenario in 2) in likely to lead us to one thing:

Re-Dollarisation!

The market in Zimbabwe has proved to wield more power and moves faster than what the law or official policy dictates. Before we know it, we will be fully dollarised, again!
Read 4 tweets

Related threads

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Alex T Magaisa 🇿🇼
@Wamagaisa
Monetary Policy - Thread

1. Zimbabwe has a “new” currency called RTGS Dollar. It’s effectively the Zim Dollar by another name, of you want to be cautious, it’s a precursor to a local physical currency which will be needed in an economy that has an appetite for physical cash.
2. Government commands that this RTGS Dollar should be used for all transactions. Curiously, even in the face of this command, government maintains the fiction of multi-currency still exists.
3. RTGS Dollar is a virtual currency (electronic) whose value will be determined by market forces. Essentially, the government has abandoned the fiction of 1:1 rate of the bond note to USD
Read 12 tweets
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MoneyZim 💰🇿🇼
@moneyzimpbc
1.Some of our readers are saying they still don't get it. Here is a simpler version: Until now you could not pay for anything locally straight from a USD nostro account - you had to withdraw USD cash first because there was no mechanism to transfer locally like you do with RTGS.
2. So zvikafamba mushe with this new system, you will be able to pay for services or goods with USD via transfer. If a bed is being sold in a store for USD200 you should be able to get their account number and transfer it to them. (And hopefully also swipe USD in the near future)
3. Present situation was that if you wanted to pay for something in USD and you bank with X bank but the one you are paying banked with Z bank - you could only withdraw cash then deposit in their account at their bank. So it's a good thing. Convenient, logical. It seems.
Read 7 tweets
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josie fiorda #AuditTheFed
@JosieFiorda
RV/Intelligence Alert: "Change" -- October 10, 2018

Operation Disclosure operationdisclosure.blogspot.com/2018/10/rvinte… dinarchronicles.com/intel.html
RV/INTELLIGENCE ALERT - October 10, 2018

(Disclaimer: The following is an overview of the current situation based on intelligence leaks received from several sources which may or may not accurate. Other confirmed sources may also be included in this overview.)
“According to sources, the United States Treasury is expecting a major change to occur in the system.”
Read 13 tweets
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Fiddler
@cFidd
So I saw a lot of #takes about how this reads like something an abuser says after hurting you and I thought they might have been hyperbolic but nope. wsj.com/articles/i-am-…
I'm very lucky in that I've only been in one abusive relationship, and WOW does this piece remind me of his "apologies."
Screaming at me for hours? He's sorry he had to do that but I should have called him back sooner.
wsj.com/articles/i-am-…
Literally ignore me at a party for hours then demand I leave with him the instant he was ready? I imagined that but even if he'd done it, well, I shouldn't have spent so long talking to that other guy.
wsj.com/articles/i-am-…
Read 12 tweets
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Foreign Ministry 🇸🇦
@KSAmofaEN
#Statement | The negative and surprising attitude of #Canada is an entirely false claim and utterly incorrect.
#Statement | We have been briefed by what the #Canadian foreign minister and the Canadian embassy to the #Kingdom released on what they named "civil society rights activists", and we affirm that this negative and surprising attitude is an incorrect claim.
#Statement | The Canadian position is an overt and blatant interference in the internal affairs of the Kingdom of #SaudiArabia and is in contravention of the most basic international norms and all the charters governing relations between States.
Read 10 tweets
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Bloomberg Economics
@economics
THREAD 1/ The ECB will halt its bond-buying program by the end of this year – a landmark decision that sets the euro area up for an exit from years of massive monetary support. Here are some highlights from the monetary policy statement bloom.bg/2JA8oWx
2/ ECB bond buying to continue at 30 billion euros a month until September and then be phased out with 15 billion euros in each of October, November and December bloom.bg/2JA8oWx
3/ ECB decided to make a firm commitment on rates: it will be on hold until at least the summer of 2019. This is the simplest, but also strongest, kind of guidance the central bank could opt for, spelling out a timeframe for its rate commitment bloom.bg/2JA8oWx
Read 7 tweets

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