1USD Will Start At 2.50RTGS Dollar When Interbank Forex Trade Begins - Mangudya

Central bank governor John Mangudya on Friday addressed a Daily News Breakfast meeting on the MPS2019. Below are some of the major highlights from Mangudya’s delivery:

• The MPS2019 means something for everyone. For the first time, there is clarity on prices and exchange rate.
• The street rate is way too high coz there is a risk premium(You can go to jail for 10yrs).
• We will reward exporters by giving them fair value for th portion of their forex which we retain.
• I am guilty as charged. Taking exporters’ money at $1:1 when prices had risen by 3 or 4 times was unfair.
• For forex dealers in the streets, they now have an opportunity to open formal beaurue de changes and trade formaly.
• Bond Notes came into effect to formalise the export incentive. The 5% incentive scheme was a shadow exchange rate. It went on well when inflation was below 5%. When the inflation went beyond 20% all hell broke loose.
• The Bond Notes+Coins is the fiet currency of the RTGS Balance in the same manner that physical USDs are a fiet currency of your dollars in th nostro account.
• The delay of the MPS was because we were taking our time to analyse all submissions.
• We will arrange foreign lines of credit since demand will be greater than the supply of forex. We need to cloud seed the market with forex.
• The RBZ will play in the Open Market by buying when the rate is low and sale when the rate is high.
• The rate will open at $1: 2.50(RTGS) as per agreement with forex dealers in the Banks.
• All import invoices have to be resubmitted to the Banks since we are starting a new thing all together- Dr Mangudya.
• The RBZ will open a window as a Lender of Last resort inorder to protect market players who are short.
• After setting up the Lender of last resort window, we will come up with a Bank Rate(Repo Rate) which will guide interest rates in the market.
• We need to strike a good balance to make the market to continue to grow and avoid treading into a recession.