Why Zimbabwe Has Banned Foreign Currencies
Zimbabwe’s government has taken the controversial decision to ban local trading in foreign currencies, including the US dollar, with immediate effect.
It has also reintroduced the Zimbabwe dollar, which was abandoned because of hyperinflation in 2009 when the country mainly adopted the US dollar and the South African rand.
The move has shocked Zimbabweans, who have little faith in a local currency – the exchange rate when the Zimbabwe dollar was scrapped was Z$35 quadrillion to $1.
What prompted the move?
The economy is a mess. Nearly everything is imported and there is a shortage of physical cash. The cost of living is very expensive. Unemployment is widespread.
Photo courtesy of Institute for Money, Technology and Financial Inclusion.