Zimbabwe to phase out worthless local dollar
The government effectively abandoned the local currency in 2009 and adopted a multiple currency system that includes the US dollar and the South African rand.
“Zimbabwe adopted the multiple currency system or dollarization in 2009 and it is therefore necessary to demonetise the Zimbabwe dollar unit,” Reserve Bank of Zimbabwe governor John Mangudya said at a news conference.
“We are decommissioning this currency.”
The southern African country once removed 12 zeros from its battered currency at the height of hyper-inflation in 2009 when the largest note was the $100 trillion denomination. Official figures put inflation at 230 million percent but put it much higher.
Mangudya said $20 million has been set aside to offset Zimbabwe dollar bank balances and to pay people still holding to the local unit.
The process will run until September, he said.
“People went through a difficult process in terms of inflation. Yes, we know that there was hyper-inflation. We need to ensure that as a country we move forward,” Mangudya said.
Zimbabwe has been saddled with a financial crisis for over a decade following President Robert Mugabe’s land reforms which decimated farming, the backbone of the economy.
Growth is expected to weaken further this year, according to the International Monetary Fund (IMF).