Zimbabwe announces end to foreign currency use amidst spiraling inflation

President Emmerson Mnangagwa has promised to introduce a proper national currency soon
Zimbabwe announces end to foreign currency use amidst spiraling inflation

Zimbabwe announced on Monday that it would abandon the use of foreign currencies which replaced the local dollar that was swiped out by hyperinflation ten years ago.

The country is facing another bout of sharply rising prices, with official inflation now at nearly 100 per cent — the highest since the hyperinflation era.

Zimbabwe’s central bank said in a statement that official legal tender would be only the two local currencies — bond notes and “RTGS” — that were introduced as US dollar banknotes dried up.

The US dollar, South African rand and other foreign currencies “shall no longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe,” the bank said.

“Bond notes and RTGS dollars are at par with the Zimbabwe dollar.”

Bond notes were introduced in 2014, while electronic RTGS (Real Time Gross Settlement) dollars came earlier this year.

President Emmerson Mnangagwa has promised to introduce a proper national currency soon.

Related: Zimbabwe’s president, Emmerson Mnangagwa promises new currency

Bond notes and RTGS dollars have in theory been worth the same as US dollars, but have fallen sharply in value.

Zimbabwe’s economy has been in ruins since hyperinflation peaked at 500 billion per cent in 2009 under president Robert Mugabe.

Mnangagwa’s efforts to attract investment and create jobs have struggled since he came to power in 2017.

Related: Zimbabwe’s inflation soars, stocks hit record high

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