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Zimdollar to return soon

by Staff reporter
22 Sep 2022 at 18:34hrs | Views
Zimbabwe's ruling party wants the country to revert to using the local currency as its sole means of exchange.

"I am very confident it's a matter of time" before that happens, Christopher Mutsvangwa, the Zimbabwe African National Union-Patriotic Front's spokesman, told reporters in the capital, Harare, on Wednesday. He didn't provide a timeframe.

The Zimbabwe dollar was abandoned in 2009 as the southern African nation contended with hyperinflation, and the country began using mainly the US dollar. The local unit was reintroduced in June 2019 and the use of other currencies was outlawed, but that policy was reversed in April 2020.

Locals mainly use the Zimbabwe dollar to pay for bills and taxes, preferring to use the greenback for the bulk of other transactions.

The local unit has lost more than 80% of its value against the US currency this year. While the official and parallel rates have diverged widely, the differential has recently narrowed after the authorities instituted measures to close the gap.

The Treasury announced in June that the US dollar will remain legal tender in the country for the next five years, a decision that was meant to ease uncertainty over currency regulations.

"What we are getting to is the domestication of the Zimbabwe currency," Mutsvangwa said. "We can no longer have a currency which is driven by foreigners. It is good for the country because our relationship as Zimbabweans is determined by our currency."

The Zimbabwe dollar was trading at 614 per US dollar at the interbank rate, according to data available Thursday on the central bank's website.

Source - Bloomberg News