Zimbabwe plans new currency on dollar woes

Zimbabwe will introduce a new currency in the next 12 months, the finance minister said, as a shortage of US dollars has plunged the financial system into disarray and forced businesses to close.

In the past two months, the southern African nation has suffered acute shortages of imported goods, including fuel whose price was increased by 150 per cent on Saturday.

Zimbabwe abandoned its own currency in 2009 after it was wrecked by hyperinflation and adopted the greenback and other currencies, such as sterling and the South African rand.

But there is not enough hard currency in the country to back up the $10 billion of electronic funds trapped in local bank accounts, prompting demands from businesses and civil servants for cash which can be deposited and used to make payments.

Finance Minister Mthuli Ncube told a town-hall meeting on Friday a new local currency would be introduced in less than 12 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.