Zimbabwe’s national currency will remain suspended for at least a year as the country turns to foreign currency to combat hyper-inflation.
“There was nothing to support the value of the Zimbabwean dollar,” Economic Planning Minister Elton Mangoma said. The country has allowed the use of foreign currency since January. Consumer prices have fallen for three months in a row since the move.
Consumer prices are currently falling by 3% month-on-month, the Central Statistical Office (CSO) said using figures collated in March. In February, prices fell by 3.1% according to the CSO.
Since taking office in February, the power-sharing government led by Prime Minister Morgan Tsvangirai has prioritised rebuilding the devastated Zimbabwe economy, starting with stabilising the currency.
According to state-controlled press, the government had decided the Zimbabwe dollar should be brought back only when industrial output returns to about 60% capacity from the current average of 20%.
An outbreak of cholera last August has killed about 4,000 people, though the World Health Organisation says the peak of the outbreak may have been passed now.
The international community has been helping Zimbabwe cope with its cholera epidemic, but most development aid is being withheld until signs of effective power sharing are deemed apparent.
Critics argue that the removal of the local currency makes it even harder for impoverished Zimbabweans to gain access to goods essential for their everyday survival.