Zimbabwe’s Currency ‘curse’ and the Economic Malaise

Zimbabwe has been plagued by currency problems. In June 2019 the government banned the multicurrency system and reintroduced the defunct Zimbabwean dollar. The move was intended to address the fast-deteriorating economic crisis and bring sanity to foreign currency supply and demand, in a broader context of economic and political failure. This policy brief discusses Zimbabwe’s currency crisis and its implications for macroeconomic stabilisation. This policy brief considers the long-term causes of the crisis, and briefly discusses some of Zimbabwe’s policy options and imperatives going forward. It does this in the context of the types of currency and exchange rate regimes in use around the world and the roles of governments and central banks; associated policy frameworks; and the experience of other dollarised economies.