USD$1:1RTGS, finance minister

Finance minister Professor Mthuli Ncube says the government will maintain the rate between the United States Dollar and the Real Time Gross Settlement (RTGS) balances will remain at par.

In a statement, Wednesday, government’s purse holder said the move is aimed at protecting people’s savings.

“Government recognise concerns surrounding RTGS deposits, and we commit to preserve the value of these balances on the current rate of exchange of 1 to 1, in order to protect people’s savings,” said Minister Ncube.

The minister said the facility will also guarantee the availability of the US$ for Nostro Foreign accounts.

“Over and above the Nostro Deposit Protection Guarantee from Afreximbank, we are also reinforcing Nostro foreign currency accounts with a statutory instrument to guarantee that these are private deposits, and neither the Reserve Bank nor government has any access to them,” stated Ncube.

He said the government is committed to resuscitating the economy by reducing fiscal imbalances which are the root cause of the many challenges the economy is facing.

“The challenges include cash shortages and the proliferation of foreign exchange parallel market rates which have a negative effect on prices,” stated Ncube.

“These challenges require that Government position the economy on a strong footing by implementing reforms that include cutting on government expenditure, working towards import parity pricing system, increasing efficiency on government delivery systems and fast-tracking the State Owned Enterprises reforms, among a host of reforms”.

Ncube also said the country will continue using the multi-currency system.

“Accordingly and in view of the need for an orderly currency reform programme that will be followed when the economic fundamentals are right to do, the country shall continue to use the multi-currency system which was put in place by Government in 2009,” he said.

The country is facing economic challenges which have seen many shops closing and others hiking pricing or demanding payment in US$ resulting in the RTGS balances losing value.