RBZ delays release of $20 Zim dollar notes. Is it chickening out?

New Zim dollar notes

The first week of June ended yesterday and what is noteworthy is that the Reserve Bank of Zimbabwe didn’t release the $20 Zim dollar notes as planned.

In mid-May the central bank promised to inject $10 and $20 notes into economy in a bid to address biting cash shortages.

In the statement, the RBZ stated that the $10 note will be released the following week, a promise which it fulfilled. It went on to say that the $20 note was going to be released in the first week of June. But the first week of June ended yesterday and there’s no news or sights of the $20 note.

Is the RBZ in fear of further depreciation of Zim dollar?

One can be tolerated in coming up with a theory which states the RBZ didn’t release the $20 note as it feared that the Zimbabwe dollar’s value could further depreciate like it did when it released the $10 note in May.

After Eddie Cross made an premature pronouncement of the new notes, the black market exchange rate was hovering around ZWL$49 but next week when the new notes where introduced it shot up to ZWL$60.

Despite Eddie Cross’ assurance that the RBZ is only increasing cash supply but not money supply, the black market is not swallowing that as its rate keeps marching on.

Now black market exchange rate hovering around 78, a cash injection of $29 notes will likely push the rate up again if past behaviour is good predictor of the future (history repeats itself). And this could be the reason why RBZ delayed releasing the $20 notes last week.

Or maybe not

But lets not overthink it, owing to the Covid-19 pandemic, maybe its just a logistical or production bottleneck that has delayed the RBZ to release the $20 note last week.

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