“Why Consumers Are Scared Of The Zimbabwean Dollar,” Analyst

An analyst has said that Zimbabweans are scared of the newly introduced Zimbabwean dollar because they do not trust the government has what it takes to sustain the currency. This comes after scores of members of the public have expressed their fear over the dramatic return of the Zimbabwe dollar.

Simon Allison, an analyst, traces the history of the Zimbabwean currencies to conclude that Zimbabwe is not a normal country.

Zimbabwe abandoned its original dollar in 2009 for the multi-currency system following hyperinflation which reached a record high of 231 million percent as per the official statistics.

The government also later introduced the bond notes in late 2016. The bond notes which were initially pegged at a 1:1 ratio with the US$ have also since failed to live up to the task. They were followed by the Real Time Gross Settlement (RTGS) in 2019 which was initially pegged at a 1:2.5 ratio against the US$.

Since its introduction in February, the RTGS dollar has been losing value against foreign currencies leading to inflation which eroded into salaries of workers.

An analyst, Simon Allison believes that there is a pattern of government failure in introducing a new currency. He notes that consumers have been rejecting the new currencies the government has been trying to introduce. He said:

They are nervous that any form of currency introduced by the current administration will lose its value, and quickly.

He concluded that trust was an essential factor in the success of any currency.

More: Simon Allison


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