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The Re-Dollarisation of Zimbabwe

Zimbabwe switched to dollarization in 2009 following the collapse of the local currency in 2008 during the country`s worst hyper-inflationary era. According to the Zimbabwean Government its yet to announce a clear and transparent roadmap towards de-dollarization to avoid shocks that may hurt the economy and drive citizens deeper into poverty.

The country was due to end dollarization in 2025 to put to bed the multi-currency regime currently in place. The Government re-introduced the local currency in 2019 after a decade of dollarization, but the local unit has failed to hold its own. This has seen some service providers charging their goods and services exclusively in United States dollars to hedge against losses while banks stopped lending in the greenback to avoid write downs.

Currently the government alongside the treasury are organizing a roadmap to de-dollarization and there are measures that the country will put in place during this process. After thorough consultations with all stakeholders, the government will come up with a published road map that will be available to all. Currently, there has been some stability, both in the currency exchange rate and prices. This is due to the policies that are in place which the government endeavor to sustain just to ensure that the government does not have spikes in the exchange rate which also fuel inflation.