Here's why Zimbabwe bans use of all foreign currencies

Here's why Zimbabwe bans use of all foreign currencies

Recently, Zimbabwe made headlines in the media of most countries after declaring the ban of international currencies such as the United States dollar, the British pound, and the South African Rand. The headlines regarding the ban have left most people questioning if this is a wise decision the country is taking or not.

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A decree by the government of Zimbabwe has outlawed the use of all foreign currencies. Mr. Ncube released the decree bearing these bans on Monday.

What is the currency in Zimbabwe?

zimbabwe

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Source: Instagram

After coming out to declare the ban on international currencies, most people have gone online to know what currency is used in this beautiful country. Before 2009, the country used the Zim dollar. However, after 2009, the currency changed. The country has not had its own fully-fledged currency since 2009.

What happened in 2009 is that authorities abolished the dollar of Zimbabwe, following the hyperinflation felt in the country. Since then the country has been using the United States dollar and multi-currencies such as the Chinese yuan, the British pound, the euro, the South African rand, the Botswana pula, the Indian rupee, and the Japanese yen.

The recently introduced currency of the country is the 'Zollar' or the Real Time Gross Settlement dollar (RTGS).

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Zimbabwe government bans the use of foreign currency

zimbabwe

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Source: Instagram

The Reserve Bank of Zimbabwe has banned the use of foreign currencies as a legal tender. This is effective from the 24th of June 2019. Based on the Statutory Instrument 142 of 2019, the United States dollar, South Africa rand, and Botswana Pula are no longer legal tender in the country. The decree revealed that all these foreign were under no circumstances be used alongside the Zimbabwe currency to transact in Zimbabwe.

The news has left most people engaging in online debates of the future of the country’s currency. As a means of defending the fledgling new currency against black market speculation, the Finance Minister of the country, Mr. Mthuli Ncube on Monday banned the use of foreign currencies such as the United States dollar and many more in local transactions. In early 2019, the country laid the foundations for a new Zimbabwean dollar that was meant to bring an end to the so-called "dollarization." To achieve this, the country had to introduce an interim currency, known as the Real Time Gross Settlement dollar (RTGS) or "Zollar".

However, since its launch in February, the Zollar or the RTGS has been struggling amidst the black-market speculation. This has seen the value of the RTGS slide sharply when compared against the US dollar.

Although the finance minister of the country Mr. Ncube is hinting at currency reforms and the execution of a full-fledged currency, Zimbabweans remain paranoid. The Zollar is struggling to keep up with the Us dollar in black market speculation, making most people skeptical about the ban of the foreign currencies by Zimbabwe.

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Source: Yen.com.gh

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