Zimbabwe to start phasing out use of US dollars at the end of 2022

The move falls under measures put in place to support Zimbabwe’s five-year de-dollarisation strategy up leading up to the year 2024.

Source: Zimbabwe to start phasing out use of US dollars at the end of 2022 | Fin24

Zimbabwe will phase out the use of foreign currency such as US dollars for the payment of local transactions at the end of 2022, according to a currency roadmap released on Wednesday.

The move falls under measures put in place to support Zimbabwe’s five-year de-dollarisation strategy up leading up to the year 2024, seen by Fin24.

The southern African country recently reintroduced the use of foreign currency for local transactions, barely a year after outlawing its use in favour of the Zimbabwe dollar.

The decision to allow the use of foreign currency for local transactions, despite the earlier ban, was meant to ease the impact of the Covid-19 pandemic that has ravaged economies across the globe.

While for the remainder of this year and the following two years till 2022, institutions and individuals will be allowed to pay for goods and services in local Zimbabwe currency or foreign currency.

In 2023, all goods and services in Zimbabwe will be “chargeable in local currency and payable in local currency using free funds” reads the strategy.

Meanwhile, payment of salaries in foreign currency will be scaled back, except for expatriates or NGOs, where it will still be allowed.

Currently, payment of salaries in foreign currency by local companies to local employees can be up to 50% at the discretion of the employer, but this will be reduced to 40% in 2021, 30% in 2022, 20% in 2023 and up to 10% in 2024.

Selected fuel dealers will be allowed to sell fuel in forex under the Direct Import Scheme, which specifies different regulations applying to fuel sales using forex.

In another major policy move, Zimbabwe plans to gradually reduce exporters’ retention thresholds “to build national forex reserves”. Previously, retention thresholds had been criticised as too high, where exporters were paying up to 45% in fees to the Reserve Bank of Zimbabwe in exchange for local currency, sparking calls to allow them to retain foreign currency instead.

COMMENTS

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    Ndebele 1 year ago

    This means that Zanu is planning another Grand Theft in the next three years by printing money – this will be their third Grand Theft with the Printing Press. Also, it means that the Banking system is totally defunct for the next 30 months but by law the Zanu Thieves will attempt to steal any US Dollars that any person is dumb enough to trust a bank with. We have been warned – the next thing they will get their Zanu Economist to write a Zanu policy statement around how this policy is to help the people! Eddie will be writing a piece giving the top Zanu Thieves a green light for brilliance in financial management – being ED, Mthuli and the RBZ. The truth is that they are having a ceasefire like in 1975 to attack the people with their most powerful weapon – the Zanu Printing Press. They feel that by the end of 2022 everybody will have forgotten about all the US Dollars that Zanu stole using the Zanu Bond Note Heist and be dumb enough to fall for it again. The MBC – the Mattress Banking Corporation will rise again – where we store our hard currency in our mattresses away from Zanu and their Pick Pocketing Zanu Bankers. The Zimbabwe Dollar will be strongest currency in Africa we were faithfully bulldusted by the Zanu Economist sitting the RBZ!! There is no Zanu Mujiba like an Octogenarian Mujiba?