Zimbabweans queue outside banks as new currency begins trading

HARARE (Reuters) – Queues formed outside banks in the Zimbabwean capital Harare on Friday as the central bank opened trading of a new currency, a Reuters witness said.

Zimbabwe’s central bank announced on Wednesday that it would scrap the peg between its quasi-currency bond note and the U.S. dollar, creating a new currency from the bond notes and notional electronic dollars that will be known as RTGS dollars.

The central bank sold banks U.S. dollars at a rate of 2.5 RTGS dollars on Friday morning, governor John Mangudya said.

Zimbabwe’s new currency is expected to begin trading at around 2.5 to the U.S. dollar, Central Bank Governor John Mangudya said on Friday, a significant devaluation as the regulator attempts to stem chronic cash shortages.

The Reserve Bank of Zimbabwe (RBZ) on Wednesday said it would scrap a peg between its quasi-currency bond notes and the U.S. dollar, creating a new currency from the bond notes and notional electronic dollars known as RTGS dollars.

Trading on the Interbank market was due to begin on Monday, although Mangudya mentioned trading had started on Friday morning.