Zimbabwe Rules Out Ditching Local Currency as Dollar Use Soars

Zimbabwe plans to keep its local currency as legal tender, even as the US dollar is now the unit of choice for most transactions in the economy, Bloomberg News reported. The extensive use of US dollars doesn’t concern authorities, who instead see it as a way to access foreign currency, according to Mthuli Ncube, the southern African nation’s finance minister. The country is ineligible to access lines of credit from multilateral financial institutions because it owes more $14 billion. “Zimbabwe is very clear, the currency for transaction is the Zimbabwe dollar and US dollar and we are very comfortable with that,” Ncube said in an interview with Bloomberg TV in London on Friday. “For now the Zimbabwe dollar exists.” Still, the highest denomination of the local unit is Z$100 — equivalent to about 10 US cents — highlighting the pressure the Zimbabwean currency is under. It has lost more than 40% of its value on the official market this year. It trades officially at Z$1,000 per dollar and between Z$1,400 to Z$1,800 on the parallel market, according to ZimPriceCheck.com, a website which tracks both official and unofficial rates. Read more.