Zimbabwe’s plan to start using its own currency is in its final stage and may happen soon.
Zimbabwe will issue new notes and coins to replace the country’s quasi currency introduced three years ago in a failed attempt to counter a crippling shortage of cash.
The return to a fully-fledged local currency exchangeable outside the country’s borders will be backed by an undisclosed amount of foreign-exchange reserves, gold, and loans, Finance Minister Mthuli Ncube told Bloomberg in an interview on August 15 in the capital, Harare.
A treasury spokesman on Monday said they first needed to compile data on the country’s reserves before commenting on how much foreign exchange would be used to back the new currency.
“We already have our own local currency, but this will be the first Zimbabwe dollar notes which will trade at parity to the bond notes,” Ncube said.
The southern African landlocked nation abandoned the Zimbabwe dollar in 2009, after a period of hyperinflation, in favour of a basket of currencies including the U.S. dollar and the South African rand. In an effort to deal with the subsequent cash shortages, it introduced so-called bond notes, and RTGS$ in their electronic form. These are not accepted outside the country.
Mr Ncube reintroduced the Zimbabwe dollar in June, accompanied by a ban on the use of foreign currencies. This led to a rapid erosion of spending power with the local dollar trading at almost 10 to the US dollar.