Zimbabwe plans new currency as dollar shortage bites
Zimbabwe will introduce a new currency in the next 12 months, the country’s Finance Minister said, as a shortage of US dollars plunges the financial system into disarray, forcing businesses to close and threatening unrest.
The southern African nation abandoned its own hyperinflation-wrecked currency in 2009 at the height of an economic recession, adopting the greenback and other currencies including sterling and the South African rand.
But without enough hard currency to back up the $10bn of electronic funds trapped in local bank accounts, businesses and civil servants are demanding payment in cash which can be deposited and used to make payments both inside and outside the country.
Mthuli Ncube told a townhall meeting late on Friday that a new local currency would be introduced in less than twelve months.
“On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years,” he said.
Zimbabwe currently has less than two weeks import cover, according to central bank data, and the government has previously said it would only consider launching a new currency if it had at least six months of reserves.
Locals are haunted by memories of the Zimbabwean dollar, which became worthless as hyperinflation spiralled to reach 500bn precent in 2008, the highest rate in the world for a country not at war, wiping out pensions and savings.