Government of Zimbabwe has issued Statutory Instrument 142 of 2019 (SI 142) which bans the use of foreign currency in the country introducing the RTGS local currency; and Bond coins and notes as the legal tender for the nation.
The ban stands as an end to the multi-currency regime that was introduced in 2009 after the fall of the Zimbabwe dollar and the Bearer Cheque.
“Subject to section 3, with effect from the 24th June, 2019, the British pound, United States, South African rand, Botswana pula and any other foreign currency and any other foreign currency whatsoever shall on longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe,” reads SI 142.
“Accordingly, the Zimbabwe dollar shall, with effect from the 24th June, 2019, but subject to section 3, be the sole legal tender in Zimbabwe in all transactions.”
Finance and Economic Development Minister Professor Mthuli Ncube has not been fond of Zimbabwe using multi-currency as he blames the US Dollar for reducing Zimbabwe’s competitiveness.
The Professor, yesterday said that use of the US Dollar, which is not printed locally, was costing the country US$2 billion.
Ncube told journalists in Harare that use of the local currency would even the unfairness in pricing going on where those purchasing in US Dollars will be paying less costly than those using local currency for the same product.
The SI 146, introduced through the Finance Minister’s comes at a time when government workers were demanding payment in US dollars.
The ban of foreign currency in Zimbabwe will however not change taxes on import duties which requires payment of imported products in foreign currency.
Use of Nostro FCA accounts, for foreign currency will continue to be used also according to the Statutory Instrument.
“… the above mentioned bond notes and RTGS dollars are at par with the Zimbabwe dollar, that is to say each bond not unit and each RTGS dollar is equivalent to a Zimbabwe dollar, and each hundredth part of a bond note unit and each hundredth part of a RTGS dollar is equivalent to a Zimbabwean cent,” the latest money related Statutory Instrument says.
“… references to the currency of Zimbabwe shall, with effect from the 24th June, 2019, be construed as references to the form of legal tender and the electronic currency with which the term “Zimbabwe dollar” is, in terms of paragraph (a) (i) and (ii), coterminous.”