Zimbabwe will introduce new dollar banknotes and coins in the next two weeks as it continues to grapple with cash challenges, its central bank Governor John Mangudya has announced.
Mangudya, speaking in his capacity as the chair of the bank’s new Monetary Policy Committee, said the Reserve Bank of Zimbabwe would introduce new Z$2 and Z$5 notes, as well as new Z$2 bond coins. Currently, only Z$5 and Z$2 bond notes are in circulation, in addition to bond coins.
Between 2009 and February of this year Zimbabwe used a multicurrency system with the US dollar as the its main currency. In 2016 it introduced bond notes and coins which, although not currency by law, were used for local transactions and traded at par with the US dollar. This system was abandoned in February after the value of bond notes plunged to trade at a huge discount to the greenback on the parallel market.
A new local dollar called the RTGS, or real-time gross settlement dollar, was floated against the US dollar in Februaryat an exchange rate of 1:2.5. The rate has fallen to 1:15.6.
The depreciation of the local currency prompted the Zimbabwean government to outlaw the use of foreign currency in local transactions, and also introduce a new local currency called the Zimbabwean dollar (ZWL$ or Z$ in June. This new currency was comprised of bond notes and coins as well as the RTGS$. Although the RTGS and bond notes are still in circulation, officials now prefer to call everything the local Zimbabwean dollar.
“The Zimbabwe dollar, comprising RTGS and bond notes, is now the designated sole legal tender in Zimbabwe — pending the rollout of a fiat currency later in the year,” Finance Minister Mthuli Ncube said in a column published in state media late in August 2019.
The Z$2 and Z$5 notes will be introduced in the next two weeks. The central bank did not provide information on when exactly the new notes will be introduced, or what they will look like.