Zimbabwe reintroduces use of foreign currency before COVID-19 lockdown

Stacks of Dollars
Close up to US dollar bank notes. (Getty Images)

Zimbabwe on Sunday reintroduced the use of foreign currencies in local transactions ahead of the start of a nationwide lockdown for 21 days from Monday to contain the spread of the coronavirus.

New exchange control regulations making it legal for Zimbabweans to use electronic and cash foreign currencies when buying local goods were also published.

“Any person may pay for goods and services chargeable in Zimbabwe dollars in foreign currency … at the ruling rate on the date of payment,” a notice by the government read.

The country’s central bank announced last week on Thursday that the use of foreign currencies was one of the measures to ease the burden of the coronavirus effects.

Last year in June, Zimbabwe made its interim currency the country’s sole legal tender bringing to an end a decade of dollarization.

Economic analysts say the reintroduction of the use of foreign currencies will only further weaken the Zimbabwe dollar.

Facing its worst economic crisis in a decade, Zimbabwe is grappling with soaring inflation and shortages of foreign currency and medicines that has crippled its hospitals.

The country’s public health sector is also in a crisis having been hit by a number of strikes last year due to demands for better pay and working conditions.

Last Wednesday, public hospital doctors opted to stay home over a lack of protective gear even as some patients’ families were asked to provide such basics as gloves and even clean water.

Zimbabwe has so far registered seven cases of the deadly virus with one fatality, a 30-year-old man who had traveled abroad and had a pre-existing condition.