The use of multiple currencies was supposed to expire at the end of 2025 but Mnangagwa extended this to 2030 yesterday.
Banks had stopped issuing loans in United States dollars.
More than 80% of local transactions are in US dollars.
Central bank governor John Mangudya says foreign currency deposits have increased from US$300 million in 2018 to US$1.6 billion by the end of September this year.
Electronic payments now dominate transactions in local currency.
Mangudya says 95% of local currency transactions are through electronic payment systems, with mobile transactions accounting for 80% of the total transaction volume.
Mnangagwa who has previously insisted that no country can develop using another’s currency seems to have given in to maintain stability and allow the use of the local currency to come back slowly.
Economist Eddie Cross has outlined five steps that have to be undertaken to ease the local currency in:
See: Why it is not in Zimbabwe’s interest to continue using the US dollar
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This post was last modified on October 28, 2023 8:25 am
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