There is light at the end of the tunnel and it seems Zimbabwe’s all-weather friend, The Afreximbank is going to give that light. I’m not sure if you were either disconcerted or reassured by the government’s intention to keep the current official exchange rate between bond notes and USD at 1:1. But I’m certain that many Zimbabweans would be happy to hear that “Afreximbank has offered Zimbabwe a facility to guarantee 1:1 convertibility of RTGS balances into US dollars.” This is according to Finance Minister, Professor Mthuli who said;
Today in Bali, Indonesia at the IMF/World Bank Meetings, I had fruitful discussions with the President of Afreximbank Dr Oramah. Afreximbank has offered Zimbabwe a facility to guarantee 1:1 Convertibility of RTGS balances into US$ and availability of US$ for Nostro FCAs.
What it means
In plain English it means that your current RTGS or Bond balances in your bank account and mobile money wallet would be US dollars should Zimbabwe and Afreximbank reach an agreement. Yes, we would start to use US dollars in our day-to-day life. Let’s pray that this comes to pass.
A more radical and far-fetched meaning
Suppose RTGS balances are going to be converted into USD for 1:1 as a result of the Afreximbank deal. It will mean that those people who have US dollars might gain by burning their US dollars into RTGS today and they get more than 3-times the amount they had in US dollars (since you get 300% more of RTGS balances than US dollars). After the Afrixembank deal, that same person would get more US dollars than they initially had, after the conversion of their 3-times-more-RTGS balances in USD dollars. Mathematically I’m saying:
Today, $100 US dollars into RTGS= $300 RTGS balance
After the Afrixembank deal, which converts RTGS balances to USD dollars at 1:1
300 RTGS into US dollars= $300 US Dollars
Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were... Read More About Bond Notes