It’s simply not true, the Zimbabwean dollar is not being accepted internationally in the way that Deputy Finance Minister, Clemence Chiduwa claimed. Mthuli Ncube’s deputy was responding to a question by a member of parliament who had asked him what the government was doing to ensure that “Bond Notes” (a colloquial name for the ZWL notes) could be traded and exchanged outside Zimbabwe. This is what he had to say:
The issue of the convertibility and regional or international acceptance of our currency as we speak now, the Zimbabwean Dollar is accepted regionally and internationally through the exchange rate. Not every currency is convertible. We are looking at currencies like the United States Dollar, the Euro, the Chinese and all that.
Not every currency can be accepted in every country. Every country has its own currency and that is what is being used locally. When you want to do international and regional transactions, then you go to your bank and convert to the accepted currency in that destination.
When using the exchange rate, it means our currency can be used locally and regionally via the exchange rate. There is no need for us to come up with a policy position to say we would want our currency to be used in the US. We use the exchange rate.Deputy Finance Minister Chiduwa
It’s lies and absolute nonsense
I am afraid there is no better way of putting it. This is all absolute nonsense. The Zimbabwean dollar unlike the Pula, Metical, Kwacha and Rand is not widely traded outside Zimbabwe. The only place where you see if being sold and bought is usually by illegal foreign currency traders at border posts. No other exchange would waste its time trading the currency and that is mainly the government’s fault. Back at the beginning of last year, the government promised it would ditch a fixed (read made-up exchange rate) and instead use a floating exchange rate.
That never went up anywhere and the government is simply back at it again. The socalled auction rate is based on an auction that is heavily influenced by the RBZ which regularly disqualifies participates and engages in a whole suit of questionable acts meant to ensure the rate stays the same. As a result the foreign currency auction rate has remained artificially law even as the unofficial market rate has soared.
The government in its feverish bid to keep the rate low has also banned other rates and the black market/free trading of the Zimbabwean dollar. This makes it pretty hard for other would-be traders to partake in the trade of the Zimbabwean dollar. It’s a situation that is unlikely to change in the near future. When you see the Zimbabwean Dollar being mentioned at other auctions it is quoted as the ZWD (the defunct currency from before the GNU in 2009). Buggy sites like Alibaba and Aliexpress sometimes show prices in this currency if you visit from Zimbabwe. It’s not a currency you can use and it’s just a bug.
To conclude here are three things to note:
- The Zimbabwe Dollar (ZWL) is not being traded outside Zimbabwe
- That is partly due to the pervasive need by the government to keep the exchange rate artificially low
- Whenever you see the Zimbabwe dollar in international exchanges it’s a bug and the dollar being referred to here is the ZWD and not the current ZWL