Zimbabwean President Emmerson Mnangagwa wants a new currency by March 2020.
What’s the situation in Zimbabwe
In February in order to combat the worst economic crisis experienced in 10 years, a quasi-currency (RTGS dollars) was introduced because the country didn’t have enough US dollars even though the US dollar is Zimbabwe’s official currency, along with the South African rand and the Chinese Yuan.
How does Zimbabwe plan to solve this problem?
The first step, settle about $1.2bn of arrears to the World Bank, African Development Bank, and the European Investment Bank via a bridge financing, then collect some loan from the IMF for the first time in the last decade.
What’s Bridge financing?
Also known as bridge funding, it’s is a form of temporary, intermediate funding typically taken out for a period of 2 weeks to 3 years, intended to cover a business’s short-term expenses until long-term funding is secured.
What’s the word on the Street?
With Inflation on the rise, there are worries that locals won’t accept a new currency that is likely to lose value as quickly as the RTGS dollar has over the last four months. 😟