Dollar and Pound banned in favour of re-introducing Zim Dollar

Foreign markets are yet to react to the news that Zimbabwe has announced the re-introduction of the Zim dollar with immediate effect.

This comes after President Emmerson Mnangagwa recently said the beleaguered country would have its own currency again by March 2020.

Earlier today though, by way of a “Statutory Instrument” (SI) directive issued by the Reserve Bank of Zimbabwe, Finance Minister Mthuli Ncube said the South African rand, US dollar, British pound and Botswana pula would no longer be allowed as legal tender in Zimbabwe.

“The Zimbabwe dollar shall, with effect from 24 June 2019, be the sole legal tender in Zimbabwe in all transactions,” according to a statement.

However, the SI announcement does not affect foreign exchange (forex)-based accounts.

Accounts related to forex would continue to deal in their respective, designated denominations, a report said.

With the country still staggering from crippling forex issues and resulting struggles to afford basic daily necessities like fuel, the move is widely seen as a desperate attempt to do away with bond notes and the real time gross settlement (RTGS) that have led to serious liquidity issues.

The SI directive said “each bond note unit and each RTGS$ is equivalent to a Zimbabwe dollar, and each hundredth part of a bond note unit and each hundredth part of RTGS$ is equivalent to a Zimbabwean cent”.

Into SA Comment

FTWonline states that at the time of posting this article, news reports of angry resistance to the decision started filtering through, with word from the street being that it’s creating havoc among consumers. But with Into SA Zimbabwe and its feet firmly on the ground in Harare, we cannot confirm that. A level of heightened anxiety maybe, but no havoc so far. Tomorrow the government will sit and deal with the latest maneuvers of the youth attacking the president and various ministers, a blatant defamation of their characters and solely aimed at destabilising the current jittery state of the country’s economy. Nothing the current captains of MS Zimbabwe cannot handle or are not used to, but ill-timed nevertheless.

The coming days will bring more clarity and the purchase of 300MW from ESKOM hopefully an end to the economy-crippling load-shedding of 19 hours a day. Has anybody asked where ESKOM all of the sudden has that amount of capacity available to sell? One wonders….

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