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| An illegal money changer counts dollar notes in Harare, Zimbabwe, January 10, 2019. REUTERS/Philimon Bulawayo |
Zimbabwe’s central bank began trading a sharply discounted replacement currency on Friday, attempting to ease a cash crunch that has hobbled the economy and plunged millions deeper into poverty.
The Reserve Bank of Zimbabwe said on Wednesday it would scrap the official 1:1 peg between its quasi-currency bond note and the U.S. dollar, creating a new parallel currency called RTGS dollars.
The central bank sold U.S. dollars to banks at 2.5 RTGS dollars on Friday morning, Governor John Mangudya told business leaders.
Commercial banks reopened on Friday after a bank holiday, but with exchange facilities from bond notes to U.S. dollars at the same 2.5 rate limited to individual and corporate holders of foreign currency accounts, queues outside appeared to be no longer than usual.
The bond notes and notional electronic funds have plummeted on Zimbabwe’s black market in recent months to around 4 per dollar, driven by a dearth of hard currency.
Economists cautiously welcomed the central bank’s decision to allow its currency to devalue.
Interbank trading was not due to start until Monday, when other account holders will be eligible to buy U.S. dollars.
