Eddie Cross was right after all

A member of the Presidential advisory committee, Eddie Cross, who also sits on the monetary policy committee was right that Zimbabwe would have a new currency in November.

He probably just broke protocol by making the announcement when that should have been done by the right person, Reserve Bank governor John Mangudya.

Mangudya announced yesterday that Zimbabwe is introducing new $2 coins and $5 notes in two weeks.

He said the new money will not fuel inflation as it would just replace the current Real Time Goss Settlement (RTGS) money.

Zimbabwe has been facing a acute shortage of cash and was forced to resort to electronic money but people have started trading the electronic money for cash at exorbitant charges.

The same fate could befall the new money if supply if not regulated as there are cash barons who are thriving on the trade of cash for RTGS money.

Zimbabwe needs at least $1.5 billion cash in circulation but currently has about $600 million.

Mangudya says the exchange rate has stabilized following the freezing of accounts said to have been fuelling the black market.

The accounts are said to have held about $1 billion.

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