Zimbabwe outlaws use of foreign currencies in bid to relaunch Zimbabwean dollar

Zimbabwe has made its interim currency the sole legal tender in the country, ending a decade of dollarisation after hyperinflation decimated the value of the Zimbabwean dollar in 2009.

Finance Minister Mthuli Ncube outlawed the use of the US dollar and a host of other foreign currencies in local transactions, as the nation looks to relaunch the Zimbabwean dollar.

The foundations for the revival of the Zimbabwean dollar were laid by the introduction in February of an interim currency called the Real Time Gross Settlement (RTGS) dollar.

However since launching, the RTGS dollar has struggled amid black market speculation that has seen its value deteriorate sharply against the US dollar.

Zimbabwe’s central bank hiked its overnight lending rate to 50% from 15% in an attempt to protect the RTGS dollar. The central bank also said it had put in place letters of credit worth US$330 million to secure imports for important goods such as fuel and wheat.

“The march towards full currency reform is part of our transitional stabilisation programme,” Ncube said in a video posted on Twitter. “This move is really beginning to restore full monetary policy,” he added.