Zimbabwe's central bank has announced the demonetization of the Zimbabwe dollar which will occur from June 15 until the end of September. The apex bank says Zimbabwe is phasing out its local currency, formalising a multi-currency system introduced during hyper-inflation.
Zimbabwe's central bank has announced the demonetization of the Zimbabwe dollar which will occur from June 15 until the end of September. The apex bank says Zimbabwe is phasing out its local currency, formalising a multi-currency system introduced during hyper-inflation.
Foreign currencies like the US dollar and South African rand have been used for most transactions since 2009. Local dollars are not used except high-denomination notes sold as souvenirs.
But from Monday, Zimbabweans can exchange bank accounts of up to 175 quadrillion (175,000,000,000,000,000) Zimbabwean dollars for five US dollars. Higher balances will be exchanged at a rate of Z$35 quadrillion to US$1.
The move has been "pending and long outstanding," central bank Governor John Mangudya said, quoted by Bloomberg. "We cannot have two legal currency systems. We need therefore to safeguard the integrity of the multiple-currency system or dollarization in Zimbabwe."
Zimbabweans have until the end of September to exchange their local dollars. Correspondents say this is likely to only affect those with savings accounts.
Zimbabwe's economy reportedly fell into a hyperinflationary spell under the leadership of dictator Robert Mugabe, who has been the country's President since 1987. Mugabe's economic policy sent the Zimbabwean economy into a tailspin as he implemented price controls and printed endless amounts of money. He was quoted as saying, "Where money for projects has not been found, we will print it."