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Be Hopeful: Mthuli Ncube Says Afreximbank Has Offered To Guarantee 1:1 Convertibility Of RTGS Balances Into USD’s

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ZimSwitch (ZIPIT) enabled card placed on top of USD in cash

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;

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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.

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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

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

7 thoughts on “Be Hopeful: Mthuli Ncube Says Afreximbank Has Offered To Guarantee 1:1 Convertibility Of RTGS Balances Into USD’s

  1. This is just another lie drawn from the bag of tricks by Zanu PF. If its true the following should happen.
    1. DSTV subscriptions should not be acceptable using RTGS balances
    2. Master and VISA cards should be activated for purchasing of good outside Zimbabwe
    3. ATM machine should start dispensing the US$ around the country
    4. Industry capacity utilization should improve
    5. Shortage of basic commodities will be a thing of the past.

    If not then this will just be another hoax similar to the one Mangudya did in 2016 when he retorted “I have high confidence in this measure we are taking. I know it will bear fruits. In the event the bond note fails, I will resign….because I would have failed the nation” Yet up to now he is still there at the RBZ.

  2. If that is the case it would then end all problems regarding shortage of forex.Yay!!!! Donot jump for joy yet this could be the Minister’s attempt to talk the blackmarket rate down (clever).

    But how is this even possible, they will guarantee even the billions that Mangudya created out of thin air. You know the money that you and i (non exporters) are not allowed to hold in our hands. Something smells fishy. There has to be a catch somewhere. Another thing to consider is why not use this opportunity to ditch this monopoly money, this provides a viable avenue to demonetize the bond and dollarize again. And why was this facility never mentioned or offered to Professor of Pfee-economics, our esteemed Reserve Bank Governer, the architect of the bond currency????? So many questions.

    The only way this could make sense is if Afreximbank offered to bail out the Zim financial system in its entirety. Which is exactly what we need.

  3. Afreximbank assets are just 12billion. If they take all the rtgs balances, they will go bankrupt. Don’t believe this non sesne.

  4. If that’s true then why not use the facility to remove the bond notes out of circulation. This must be another trick from the bag of tricks! Hanzi ndatenga amwe madhongi ekufananidza nemombe, ko kungotenga dziri mombe dzacho! Mvana haimitiswe katatau nemurume mumwechete! Chakachenjedza ndochakatanga!

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