Zimbabwe to issue new currency notes to counter cash shortage

Zimbabwe will issue new notes and coins soon to replace the country’s quasi-currency that was introduced three years ago in a failed attempt to counter a crippling shortage of cash.

The return to a fully-fledged local currency exchangeable outside the country’s borders will be backed by an undisclosed amount of foreign-exchange reserves, gold and loans, according to the country’s finance minister, Mthuli Ncube.

Zimbabwe abandoned the Zimbabwe dollar in 2009, after a bout of hyperinflation in favour of a basket of currencies including the US dollar and the South African rand.

In a bid to deal with the subsequent cash shortages, it introduced so-called bond notes and RTGS dollars in their electronic form, which are not accepted outside the country.

Ncube re-introduced the Zimbabwe dollar in June, accompanied by a ban on the use of foreign currencies-leading to a rapid erosion of spending power with the local dollar trading at almost 10 to the greenback.

Bond notes were officially said to be at parity as recently as February.