Zimbabwe’s central bank reversed a ten-year-old policy that recognised a basket of foreign currencies as legal tender, ordering businesses to only price goods and services in local currency.
In a notice published on Monday, 24 June 2019, the Reserve Bank of Zimbabwe (RBZ) said the local currency, Real Time Gross Settlement (RTGS) dollar, would be the sole legal tender for all transactions with effect from Monday, 24 June 2019.
“The British pound, United States dollar, South African rand, Botswana pula and any other foreign currency whatsoever shall no longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe,” the RBZ said.
The move follows a recent development in which most providers of goods and services had begun accepting only United States dollars or were now demanding local currency prices that are more than 12 times the US dollars.
It is an about-turn on a decision by the Zimbabwean authorities in February 2009 to introduce a basket of foreign currencies that have been accepted as legal tender over the past decade.
The decision to introduce a basket of currencies was taken at a time when the then Zimbabwe dollar was continually losing value.
The RTGS dollar was introduced in February, with the government saying at the time that this was the first step towards a new currency by year-end.
The new currency has, however, been losing value and had by Monday, 24 June 2019, depreciated by around 60 percent against the US dollar on the official market and around the same margin on a thriving black market.