Zim dollars only: Finance minister Ncube bans foreign currency

Foreign
currencies are no longer acceptable as legal tender in Zimbabwe, with Finance
Minister Mthuli Ncube saying Monday that the Zimbabwe dollar is now the only
acceptable medium of exchange for local transactions.

This
effectively sidelines the multiple currency regime that Zimbabwe has been using
alongside the bond notes and the recently introduced RTGS$ currency. In a
Statutory Instrument (SI) on Monday, the Zimbabwean Minister of Finance
gazetted the official side-lining of the SA Rand, Botswana Pula and US Dollar
as legal tender.

“The
Zimbabwe dollar shall, with effect from 24^th June 2019 … be the sole
legal tender in Zimbabwe in all transactions,” reads the SI.

The
new finance measures have been legally effected under The Reserve Bank of
Zimbabwe (Legal Tender) Regulations 2019.

“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.”

It
also notes that “the opening or operation of foreign currency designated
accounts… shall continue to be designated in the foreign currencies with
which they are opened and in which they are operated”.

No tampering

Ncube
has previously said free funds, and foreign currency accounts for Zimbabwean
individuals, organisations and companies will not be tampered with. Zimbabwe is
struggling for foreign currency and this has seen the embattled SA northern
neighbour experience a financial crisis.

Officials
have been battling against steep rises in parallel market foreign currency
rates despite introducing an interbank market from which companies have to
source foreign currency early this year. However, the interbank market has
struggled for liquidity, amid rampaging exchange rates of as high as 1:10 for
the RTGS$ against the US Dollar.

In
line with the new finance regulations, notes the SI, the following directive
has also been issued in terms of valuation for the bond notes and coins as well
as RTGS$ against the Zimbabwe dollar: “The bond notes and RTGS$, that is to say, each bond note unit and each RTGS$, is equivalent to a Zimbabwe dollar; and each
hundredth part of a bond note unit and each hundredth part of s RTGS$ is
equivalent to a Zimbabwean cent.”

Last week, President Emerson Mnangagwa was
quoted saying Zimbabwe will have its own currency by March next year. He had
also heaped praises on Ncube for guiding Zimbabwe to a budget surplus, although
he has been heavily criticised for this, especially in light of galloping
inflation.