Zimbabwe bans foreign currency

Zimbabwe banned the use of foreign currency in transactions on June 24 while reintroducing physical Zimbabwean dollar bills.

Zimbabwe has struggled with maintaining its own currency, dropping the previous Zimbabwean dollar in 2009 due to hyperinflation and making multiple foreign currencies, including the US dollar, South African rand and Chinese yuan, official currencies. At that time, one US dollar was worth 35 quadrillion Zimbabwean dollars.

In October 2016, the country began printing “zollars,” which were meant to be equal in value to US dollars but did not maintain that valuation on the open market.

In February 2019, Zimbabwe ceased zollar production and introduced the Real Time Gross Settlement (RTGS) dollar, whose value, unlike that of the zollar, was not tied to a foreign currency. When the RTGS dollar ceased being traded upon the reintroduction of the Zimbabwean dollar, its inflation rate was about 100%.

Zimbabwe’s government has said that they have banned foreign currencies to drive use of the new Zimbabwean dollar and reduce black-market dealings. However, there is little confidence in the new dollar among the population, and there are reports that the US dollar is still preferred for most transactions.