Zimbabawe to Re-introduce Local Currency

Zimbabwe is about to issue new notes and coins to replace the country’s quasi currency, that was introduced three years ago in a failed attempt to counter a crippling shortage of cash and that’s pushed inflation to the highest rate since 2008. According to the Finance Minister, Mthuli Ncube, the return to a fully fledged local currency will lead to it being exchangeable outside the country’s borders. It will be backed by an undisclosed amount of foreign-exchange reserves, gold and loans. The southern African nation abandoned the Zimbabwe dollar in 2009, after a bout of hyperinflation, in favour of a basket of currencies including the U.S. dollar and the rand. In a bid to deal with the subsequent cash shortages it introduced bond notes and RTGS dollar in their electronic form, which aren’t accepted outside the country. Ncube reintroduced the Zimbabwe dollar in June, accompanied by a ban on the use of foreign currencies. This led to a rapid erosion of spending power with the local dollar trading at almost 10 to the greenback. Bond notes were officially said to be at parity as recently as February.