Zimbabwe Informal Traders Dump Zimdollar, Anticipating Debut of New Currency
Zimbabwean informal traders are expressing reluctance to accept the local dollar, fearing its imminent depreciation with the introduction of the government’s new gold-backed currency, Zimbabwe Gold (ZiG), at the end of April. The move aims to replace the collapsing Zimbabwean dollar and stabilize the country’s economy, which has been plagued by hyperinflation.
However, many traders, particularly those in the cash-driven informal sector, are opting to transact in U.S. dollars instead of the local currency. They are concerned that the Zimbabwean dollar may become worthless once ZiG is introduced, marking the country’s third attempt at introducing a new currency in the past decade.
The refusal to accept the local currency has created challenges for vendors and traders who were holding Zimbabwean dollars, rendering their cash holdings effectively worthless. Despite the central bank’s directive urging businesses to continue accepting payments in Zimbabwean dollars until the end of April, many traders are choosing to accept only U.S. dollars due to the rapidly depreciating value of the local currency.
The introduction of ZiG has caused a significant depreciation of the Zimbabwean dollar, leading to an increase in demand for U.S. dollars on the black market. Currency traders are taking advantage of this demand by offering higher exchange rates for U.S. dollars, further exacerbating the depreciation of the local currency.
While larger supermarkets have begun displaying prices in ZiG and accepting the new currency, some retailers, including Zimbabwe’s OK and South Africa’s Pick n Pay, continue to accept the Zimbabwean dollar. However, the rejection of the local currency by many informal traders highlights the widespread skepticism and uncertainty surrounding the success of the new currency and the government’s economic policies.
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