The Reserve Bank of Zimbabwe has with effect from 24th June 2019, banned the use of foreign currencies as legal tender in Zimbabwe. This was announced in a Statutory Instrument 142 of 2019.
The government gazette instructs that the United States Dollar, Botswana Pula and South Africa Rand are no longer legal tender in Zimbabwe.
The SI reads in part:
Subject to section 3, with effect from 24th June 2019, the British pound, United States dollars, 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.
Since taking over as finance minister, Ncube has hinted at currency reforms and the introduction of a full-fledged currency.
Monday’s decree is believed to be part of those reform efforts. But some economists are sceptical whether it can stop the country from gravitating back towards foreign currencies.
“Definitely, it is an attempt to stop redollarisation,” said Bhoromoa. “However dollarisation has many levels. Zimbabwe will still be in de-facto dollarisation as long as inflation levels for the Zimbabwean dollar are very high and in the absence of confidence in government institutions.”
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