Thread by @shingaiRndoro

#NewZimCurrency
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1/11 I previously warned people about the coming of a new currency earlier than expected & that those with USD bought at a higher rate will count losses more.

Without your indulgence, I would like to unpack th introduction of the new currency.

2/11 At th beginning of this month I also advised fellow Zimbabweans that th FinMin & his PermSec are Advocates of #FreeMarketEconomics (insultingly called “neo-liberal” economics by socialist minded commentators) swimming against a sewage tide of #Statist or #CommandistEconomics

3/11 An economy isn’t reliant on monetary policies only but these monetary measures affect, influence & determine value of production, trading, contracts & property.

There are so many governance&fiscal actions that are required 2 make monetary interventions work. Another topic!

4/11 The parallel or street exchange rate today was 12.50 & was galloping towards more than that of the South African Rand which is at 14.30.

The interbank or official rate is at 6.32.

These two rates had failed 2 converge. Policies & state & private actors were driving it.

5/11 It was convenient for th @ReserveBankZIM to settle its domestic obligations by using less forex if the exchange rate is high.

A new currency has now been introduced when the 2% levy on all digital transactions & a higher rate have been to pay off lots of debts.

6/What does this mean? Any forex transaction has been outlawed. All domestic transactions in ZW$.

Anyone needing forex will hav 2 go 2 th bank.

Anyone selling forex will have 2 offload it 2 th banks & bureau de changes at interbank rate.

FCA Nostro accounts aren’t affected.

7/11 It’s not a crime to be found with forex but it’s a crime to trade in forex.

The mode of payments aren’t affected except that soon th Word RTGS will be replaced by ZW$.

Duties for imports on luxury & selected goods shall remain in forex.

8/11 If you have forex, there is temptation to keep it expecting that the interbank or official rate of 6.33 shall reach the level of the parallel or street rate of 12.50.

State & private actors that were behind this may be under surveillance & monitoring. They weren’t many!

9/11 Th biggest companies like Econet, Delta, etc, that hav been generating local currency daily were also in a race 2 convert their earnings in2 forex will cease & desist doing so because corporates don’t want th adverse publicity associated with blatant violation of th new SI.

10/11 If you have a production or trading activity, contract & property, will you be angry with @MthuliNcube by preserving your value?

On this matter, there is a big difference with Gideon Gono’s ill thoughtout actions.

11/11 Formal banking has been restored.

The commercial unit of th police will be very busy.

The forex market is now formal.

A jail is by your doorstep by wanting to violate the new regulation.

A newly designed ZW$ bank notes & coins won’t be long before they are launched.

12/11. Extra...If you are in ZW & you have been earning ZW$ without any increase 2 match th increase in th exchange rate or cost of living, don’t you agree with th new currency measures?

If your customers or borrowers owed you in ZW$, don’t you see this benefits you?

13/11 Mthuli has done what he can. Let those who are economically literate critique what has has done & suggest better & more sustainable interventions & policy proposals.

His actions may not be the best. Let others come forward in civility.

I’m keen for IDEAS.