No More National Currency For Zimbabwe
But according to the latest events and news reports to come out of the country, it seems that it simply wasn’t enough to get things back on track. Very recently it has been decided that the currency – the Zimbabwe dollar – is no longer going to be used, at least for the foreseeable future. According to statements by the Economic Planning Minister in the country, the dollar is not going to be used for one year at the very least.
But will this step make any difference? On the surface it seems to be a major one, but in reality the dire situation of the Zimbabwean dollar has been going on for quite some time. This means that a lot of people who live in Zimbabwe have long since reverted to using other currencies to try and live on.
And who can blame them? Newly printed banknotes in the trillions of dollars were printed not very long ago to try and cope with the situation. But even then a note of that size could not buy you the simplest of provisions because it wasn’t enough. That was – and is – the extent of the inflation that is going on in the country.
So the suspension of the Zimbabwean dollar – as reported in this Reuters news report - seems to be the logical and natural route to take. But in reality it doesn’t seem to have made a whole lot of difference.
The people of Zimbabwe have already had to resort to other measures to be able to buy the things they need to have in their everyday lives. For several weeks now they have been using other currencies to ensure they can carry on getting by in their lives. The Zimbabwean government made this possible by legalizing the use of those currencies at the beginning of the year. Until then things were pretty dire – and as soon as they did take the step of legalizing the use of other currencies everyone has been using them and ditching the Zimbabwean dollar as quickly as they possibly could.
The real question is perhaps whether they will be so quick to revert back to using the Zimbabwean dollar when the time comes. While it is provisionally set as being a year until that happens, the government has decided that certain stipulations must be met in order for it to occur. There would be no point re-introducing the currency after a year if nothing much had changed.
Food prices are already falling though since the currency was ditched, so it will be interesting to see what happens over the coming months. No doubt the currency will be back sooner or later, but it could be more than twelve months until it does return. Until then the Zimbabweans are continuing to use the Euro, the US dollar and the British pound among others. Currencies of countries that are much closer geographically are also being used, giving the Zimbabweans a mixture of around half a dozen currencies that can be used as legal tender in the country.
It has been said though that one of the reasons the country is in this situation to begin with is because so many banknotes were printed to try and resolve the problems it was facing. It has long been known that this is a dangerous method to use, and the resulting situation in Zimbabwe is proof of what can happen if it continues unabated.
So will we see the return of the Zimbabwean dollar eventually? It is probable that we will, but some think it could be far longer than a year before it happens. The country has a very long way to go before it reaches the kind of level it needs to be at to get its currency back. Unemployment is said to be at phenomenal levels – around 90% - and that doesn’t bode well for the future of the country at this stage.
We will report on any further developments as and when they occur.