Zimbabwe has adopted its interim currency as the country’s sole legal tender on Monday in a bid to stem black market demand for foreign currencies.
The RTGS dollar was introduced in February 2019 as a first step towards a new currency by the year’s end. This is a main part of President Emmerson Mnangagwa’s plan to stabilise an economy racked by inflation and widespread shortages.
According to the official statement, “the British pound, United States dollar, South African rand, Botswana pula, and any other foreign currency shall no longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe”.
The latest variation of the domestic currency, the RTGS, has struggled to gain trust among large corporations and everyday Zimbabweans. Economic analysts fear 2009 may repeat itself with the interim currency.
Last week, the International Monetary Fund (IMF) requested that the central bank allows the RTGS to float freely so that exporters could sell dollars at the interbank rate rather than surrender them to the central bank
On the official interbank rate, the RTGS currency was pegged at 6.2 but on Monday, it traded between 11 and 12 against the dollar on the unofficial market.
But, Zimbabweans are complaining that goods and services are still being priced in other currencies. While more than 80% of Zimbabweans earn RTGS dollars, goods ranging from bricks to rentals, car parts and many groceries have their prices pegged in U.S. dollars.
Inflation has climbed to a decade high 97.86%, eroding salaries and savings and causing Zimbabweans to fear a return to the hyperinflation of 2008 when the rate reached 500 billion per cent.