US Dollar Replaces Zimbabwe Dollar For A Second Time
The United States dollar has replaced the Zimbabwean dollar as the most-used currency in the southern African nation for a second time.
According to a Bloomberg report, US dollars were utilised for 77% of transactions this year, surpassing the proportion that was conducted in the local currency for the first time since it was reissued in June 2019.
Zimbabwe abandoned its own currency in 2009 and replaced it with the US dollar and other foreign currencies after hyperinflation had rendered it worthless.
The local currency was reintroduced in 2019 in an attempt to revive the stagnating economy.
The Zimbabwean dollar has depreciated 91% against the US dollar in the last two years to trade at 944 at the official rate and about 1 600 on the parallel market.
Local businesses now charge in greenbacks for everything from food, and fuel to medicines.
Cement maker PPC Ltd.’s local unit said in its latest financial statement, that 79% of sales were in US dollars.
Speaking to Bloomberg, Gift Mugano, an economics professor at the Durban University of Technology, said:
Passports are paid for in dollars, some taxes in foreign currency, fuel is in dollars and you can also pay toll gates in dollars.
Prosper Chitambara, a Harare-based economist, said “the economy for all intents and purposes is largely dollarized”.
The surge in dollar usage in Zimbabwe comes as China has made the internationalization of the yuan a top priority.
Countries including Russia, India and Saudi Arabia have sought to include non-dollar payments in their financial systems to reduce their dependence on the US.
More: Pindula News
