Currency Developments vs Dollarisation – Implications for Industry

The Zimbabwe dollar was set as the legal tender with effect from June 2019, signalling an ‘end’ to the multicurrency regime. However, Government lacked consistency in the implementation of the mono currency with Zimbabwe Dollar as the sole legal tender, as it went on to exempt other institutions and sectors to continue trading using foreign currency. Government showed lack of confidence in its own policy measures and the markets reacted, foreign exchange market instability increased, the parallel market rates, which are the main source of foreign currency for business galloped. The implications for industry and the economy, counting the cost.