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Zimbabwe phasing out inflation-battered local currency

Zimbabwe is phasing out its local currency, the central bank says, formalising a multi-currency system introduced during hyper-inflation.

As inflation hit six years ago, foreign currencies like the US dollar and South African Rand came into use.

From Monday, Zimbabweans can exchange bank accounts of up to 175 quadrillion (175,000,000,000,000,000) Zimbabwean dollars for five US dollars.

Higher balances will be exchanged at a rate of Z$35 quadrillion to US$1.

The move has been “pending and long outstanding,” central bank Governor John Mangudya said, quoted by Bloomberg.

“We cannot have two legal currency systems. We need therefore to safeguard the integrity of the multiple-currency system or dollarization in Zimbabwe.”

Zimbabweans have until the end of September to exchange their local dollars.

Hyper-inflation saw prices in shops change several times a day, severe shortages of basic goods and Zimbabweans taking their money to market in wheelbarrows.

The last bank note printed by Zimbabwe was for Z$100 billion, still not enough for a bus ticket.

Zimbabwe’s economy has struggled since a government programme seized white-owned farms in 2000, causing exports to tumble.

Source:www.bbc.com

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