The Zimbabwean dollar (currency sign: Z$; code: ZWL), also known as the Zimdollar or Real Time Gross Settlement ( RTGS) dollar, was the currency of Zimbabwe from February 2019 to April 2024. It was the only legally permitted currency for trade in Zimbabwe from June 2019 to March 2020, after which foreign currencies were legalised again.
Due to the sharp depreciation of the Zimdollar, beginning almost immediately after its introduction, where possible, most transactions were being done in hard currencies, such as the U.S. dollar, despite their illegality until March 2020. On 5 April 2024, it was announced that the Zimdollar would be replaced by the new Zimbabwean ZiG (ZiG), a Gold standard, starting on 8 April. On 31 August 2024, the Zimbabwean dollar (ZWL) was officially retired.
History
Background
The multi-currency system eventually resulted in a liquidity crisis, because Zimbabwe had to import more than what they could export, resulting in a net exodus of US dollars. Eventually, the Reserve Bank introduced a series of bond coins on 18 December 2014, and bond notes on 28 November 2016, after securing a total of US$250 million in loans from the African Export-Import Bank.
Although bond money was officially interchangeable at par with the US dollar, the general public quickly resisted them as an attempt to reintroduce the Zimbabwean dollar, which had gained a bad reputation due to hyperinflation. That, along with the continued shortage of US dollars in Zimbabwe, resulted in a thriving parallel exchange rate that ranged between $3.00 and $3.80 in bond money to the US dollar, in February 2019.
Introduction of the fifth dollar
On 24 June 2019, the Zimbabwean government renamed the RTGS dollar as the Zimbabwean dollar, and banned the use of foreign currencies in an attempt to end the multi-currency system. The BBC reported widespread opposition to the ban, partly due to continued public distrust, partly due to high inflation, and partly due to traders still having to use hard currencies to import goods from abroad. The onset of the coronavirus pandemic soon forced the Reserve Bank to reinstate the multi-currency system, on 29 March 2020.
On 29 October 2019, the Reserve Bank claimed that a new currency would replace the fifth dollar. This claim turned out to be a new $2 bond coin, and revised $2 and $5 banknotes without the "bond note" inscription: both entered circulation on 11 November 2019. The Reserve Bank continued to introduce higher value banknotes, with the $100 note entering circulation on 5 April 2022.
Continued high inflation
The inflation and ensuing depreciation of the Zimbabwean dollar is the result of the Reserve Bank of Zimbabwe increasing the money supply. In February 2019, the broad money supply was Z$10.4 billion. By the end of 2022, it had swelled to Z$2.34 trillion. In May and June 2023, the money supply quadrupled in just two months, resulting in the Zimbabwean dollar rapidly depreciating.
| 14,768 |
| 35,018 |
| 99,821 |
| 204,925 |
| 302,934 |
| 475,362 |
| 1,119,696 |
| 2,338,227 |
| 14,275,475 |
| 18,914,587 |
| 59,171,485 |
The Zimbabwean dollar continued to depreciate. From January to April 2024, it lost over 70% of its value at the official exchange rate, hitting Z$30,000 per US dollar on 5 April. Annual inflation increased from 26.5% in December 2023 to 55.3% in March 2024. The money supply at that point had grown to Z$59 trillion, having increased by a factor of nearly 5,700 since the currency was introduced.
Introduction of Zimbabwean ZiG
Banknotes
In 2022, the Reserve Bank started the process of removing $2 and $5 banknotes from circulation, due to long-term high inflation: on 5 April 2022, the official exchange rates for those banknotes were 1.4 and 3.5 US cents, respectively.
Bond notes
| +Bond notes, 2016 (Signature: John Mangudya, Capital: Harare) ! rowspan="2" | Albert Pick No. ! colspan="2" | Image ! rowspan="2" | Value ! rowspan="2" | Dimensions ! rowspan="2" colspan="2" | Main colour ! colspan="3" | Description ! colspan="3" | Date of | |||||
| 99 | $2 | 155 × 62 mm | Green | Balancing rocks of Zimbabwe with trees | Eternal Flame at the National Heroes' Acre, and the Old Parliament House | Zimbabwe Bird and "RBZ" | 2016 | 28 November 2016 | 11 November 2019 | |||
| 100 | $5 | 155 × 66 mm | Purple | Balancing rocks of Zimbabwe with trees | Three giraffes and the Zimbabwe Aloe ( Aloe excelsa) | Zimbabwe Bird and "RBZ" | 2016 | 3 February 2017 | 11 November 2019 | |||
2019–2024 series
The $50 note entered circulation on 6 July 2021, and became the first Zimbabwean banknote since the withdrawal of the Rhodesian pound in 1970 to feature a person: a portrait of Mbuya Nehanda, a significant figure of Zimbabwean nationalism, appears on reverse with the Tomb of the Unknown Soldier at the National Heroes' Acre. This was followed by the $100 banknote on 5 April 2022, which featured the ruins of Great Zimbabwe.
| +2019 banknote series (Signature: John Mangudya, Capital: Harare) ! colspan="2" | Image ! rowspan="2" | Value ! rowspan="2" | Dimensions ! colspan="2" rowspan="2" | Main colour ! rowspan=2 | Obverse ! rowspan=2 | Reverse ! rowspan=2 | Watermark ! colspan="3" | Date of ! rowspan="2" | |||
| $2 | 155 × 62 mm | Green | Domboremari with trees | Eternal Flame at the National Heroes' Acre, and the Old Parliament House | Zimbabwe Bird and "RBZ" | 2019 | 11 November 2019 | 30 April 2024 | |||
| $5 | 155 × 66 mm | Purple | Three giraffes and the Zimbabwe Aloe ( Aloe excelsa) | 2019 | 11 November 2019 | 30 April 2024 | |||||
| $10 | 155 × 66 mm | Red | New Reserve Bank Tower and four ( Syncerus caffer) | 2020 | 19 May 2020 | 30 April 2024 | |||||
| $20 | 155 × 66 mm | Blue | African elephant and Victoria Falls (Mosi-oa Tunya) | 2020 | 1 June 2020 | 30 April 2024 | |||||
| $50 | 155 × 66 mm | Brown | Tomb of the Unknown Soldier at the National Heroes' Acre, and Mbuya Nehanda | 2020 | 6 July 2021 | 30 April 2024 | |||||
| $100 | 155 × 66 mm | Yellow | African baobab ( Adansonia digitata) and the ruins of Great Zimbabwe | 2020 | 5 April 2022 | 30 April 2024 | |||||
Relationship with foreign currencies
Exchange rates
Annual inflation in the period ending July 2020 was 837.53% as reported by ZIMSTAT.
The exchange rate is determined by the forces of supply and demand on an auction market the Reserve Bank of Zimbabwe set up along with the announcement of the RTGS dollar. The market is called Interbank Foreign Currency Exchange Market and is made up of banks and bureaux de change.
In late June 2020 the Reserve Bank of Zimbabwe launched a new weekly auction of foreign currency, to try to curb the rampant inflation which had driven the Zimdollar down to = 80 Zimdollars. Inflation continued for the Zimdollar, and by May 2022, it was "officially quoted at 165.94 against the U.S. dollar while sliding continuously on the black market, where it is was currently trading between 330 and 400 to the US dollar." In an attempt to stop additional speculation in the Zimdollar, in May 2022, the Treasury ordered banks to stop lending, to be effective immediately.
In July 2022 the Reserve Bank of Zimbabwe announced the introduction of official gold coins into the market "as a store of value". The gold coins are called "Mosi-oa-Tunya", and they are expected to be sold for either Zimdollars or United States dollars at rates based upon the prevailing international price of gold plus the costs of production. On 12 February 2024, the Finance Minister of Zimbabwe, Mthuli Ncube, said the Zimbabwean dollar could have its exchange rate linked to gold. In this case, it would be the only country in the world with the gold standard.
On 5 April 2024, the Reserve Bank of Zimbabwe announced a new currency to be introduced on 8 April, called Zimbabwean ZiG (ZiG), backed by a basket of reserves comprising foreign currency and precious metals (mainly gold). Zimbabweans were given 21 days to convert their cash into ZiG.
The Zimbabwean dollar experienced rapid depreciation before its replacement. Between 2 May and 17 June 2023, it depreciated by about 83%, from Z$1,070.42 to Z$6,351.50 against the US dollar, at the official exchange rate. On 30 January 2024, it weakened past Z$10,000 per US dollar, and on 22 March 2024, it dropped below Z$20,000 per US dollar. On 5 April 2024, it hit Z$30,000 per US dollar, the same day the new currency was announced.
See also
- Zimbabwean bond notes
- Zimbabwean bond coins
- Zimbabwean ZiG
Notes
External links
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