In a bid to defend its fledgeling new currency against black
market speculation, Zimbabwe‘s Finance Minister Mthuli Ncube has
outlawed the use of the US dollar and a host of other foreign currencies
in local transactions.
In 2009, Zimbabwe allowed the US dollar and other foreign currencies
to be used as legal tender in the country after hyperinflation decimated
the value of the Zimbabwean dollar.
Earlier this year, to pave the way towards ending so-called
“dollarisation”, the country laid the foundations for a new Zimbabwean
dollar by introducing an interim currency, the Real Time Gross
Settlement dollar (RTGS) or “zollar”.
But since its launch in February, the RTGS has struggled amid black
market speculation that has seen its value slide sharply against the US
Monday’s government decree values the RTGS at par with the Zimbabwe
dollar and mandates it be used as the country’s sole legal tender for
local transactions with immediate effect.
“The British pound, United States dollar, South African
rand, Botswana pula and any other foreign currency whatsoever shall no
longer be legal tender alongside the Zimbabwe dollar in any transactions
in Zimbabwe,” read the decree.
But some believe the measure will not arrest the decline of the RTGS.
“I think its ridiculous measure,” said Eddie Cross, an
economist and founding member of the Movement for Democratic Change, the
main opposition party in Zimbabwe.
“The exchange rate will run and this is completely out of sync. For
heaven’s sake, this is economic sabotage. I hope people will not go on
the street tomorrow. This is just catastrophic,” Cross told Al Jazeera.
Independent economist Victor Bhoroma said businesses with debts
denominated in foreign currencies could see the cost of servicing those
“It means that all debts contracted in USD are now
payable in the local currency,” Bhoromoa told Al Jazeera.” All products
and services that were being indexed in USD (ie, insurance and property)
since it was legal tender will now be indexed in local Zimbabwean