Zimbabwe delays end of multi-currency system to 2030
Zimbabwe will extend its multi-currency system, with the U.S. dollar as its anchor, until 2030, according to an announcement made on Friday.
Previously, the government had indicated that the multi-currency system would be phased out by 2025. This has led to uncertainty in the banking sector, with some banks refusing to approve loans beyond 2025.
In a government gazette, President Emmerson Mnangagwa revoked the 2019 order that had set the 2025 deadline.
The gazette specifies, “Settlement of any transaction or payment for goods and services in foreign currency shall … be valid until the 31st December 2030.”
Economists point out that nearly 80% of local transactions are conducted in U.S. dollars due to diminishing confidence in the Zimbabwean dollar.
The largest independent asset manager in Zimbabwe earlier predicted that the US dollar would continue to be the dominant currency in the country, even beyond the government’s December 2025 deadline to phase it out of the economy.
In 2009, Zimbabwe abandoned its inflation-ravaged dollar and adopted foreign currencies, primarily the U.S. dollar. The government reintroduced the local currency in 2019, but it quickly depreciated once more.
Zimbabwe recently held the title for the world’s highest interest rate, at a staggering 150%. However, it has now lowered to 130%, relinquishing the top spot to Argentina.
Despite multiple efforts by authorities to boost confidence, the Zimbabwean dollar has depreciated by over 80% this year, as reported by economists.
