Given the lack of reforms and the underperforming local industry the Zimbabwean dollar has been in a free fall. According to the International Monetary Fund (IMF) it is the worst-performing currency in the world by a mile. The currency has lost about 90% of its value since it was introduced back in February.
The government tries to stem the tide using laws
Given its continuous loss of value people have naturally sought to find refuge in the US dollar and to some extent the Rand. Even though the laws passed on 24 June say the Zimbabwean dollar is the sole currency it didn’t really explicitly ban certain uses of the US dollar for domestic purposes.
The government has now sought to rectify this by passing two new laws under the Temporary Presidential powers:
- Statutory Instrument 212 of 2019 known as Exchange Control (Exclusive Use of Zimbabwe Dollar For Domestic Transactions) Regulations, 2019
- Statutory 213 of 2019 Temporary Presidential Powers Amendment of the Exchange Control Act
The first explicitly bans the use of foreign currency for local transactions instead of just saying the Zimbabwean dollar is now the sole domestic currency. However, the government duplicitously gives itself some exceptions for example when levying duty as well as for some transactions.
The second Statutory Instrument introduces penalties to those who are found to be violating the provisions of Statutory Instrument 213 and 142 of 2019. Penalties are called civil penalties which means fines rather than jail.