Around 80% of local transactions are in U.S. dollars due to low confidence in the Zimbabwean dollar. The government has decided to extend the multi-currency system, centered around the U.S. dollar, until 2030.
Zimbabwe abandoned its inflation-ravaged dollar in 2009, opting instead to use foreign currencies, mostly the U.S. dollar. The government reintroduced the local currency in 2019, but it rapidly lost value again.
The government had previously said that the multi-currency system would end in 2025, which had triggered uncertainty in the banking sector, with some banks refusing to give loans past 2025.
"Settlement of any transaction or payment for goods and services in foreign currency, shall ... be valid until the 31st December, 2030," reads the gazette.
Why this helps…
The extension of the multi-currency system is expected to give businesses assurances to plan ahead, and financial institutions can now extend long-term loans to ramp up production and stimulate economic growth.