US Dollar now base currency

Staff Reporter 01-06-2009

Banks have successfully implemented a new system where the United States dollar is now the base currency relegating the Zimbabwean dollar to being an equivalence of foreign currency. This marks the end of almost 28 years of the local unit’s function as the base currency.

A system change was completed on Sunday so that the system would start operating with the beginning of the new month. Z$ accounts were also converted to reflect the change in the currency base at a rate which saw an equivalent of Z$6 quad trillion being US$0.11.

Despite dollarisation, as announced at the beginning of February by the Reserve Bank of Zimbabwe governor Dr Gideon Gono, the local currency had continued to operate as the base currency. However, this changed at the weekend with the system change which was initiated by the central bank.

What it now means is that all transactions in the country are based on the US$ and the local unit now functions like an external currency.

Sources in the banking sector told Businesszimbabwe.com that they were very busy on Sunday making sure that the system was implemented successfully.

“We went to work with the information technology departments to make sure that the change over was successful. What we did is like upgrading the US$ which until then was currency 1 to becoming currency 0 (base currency) taking over from the Zimbabwe dollar which now is currency 43. Being currency 43 is not reflective of anything as it is just a number, What it now means is that when trading the local currency is the US$ and the local unit is now foreign currency,” said the source.

He added that the change was merely an administrative exercise which may not have a material effect on the current currency regime