Although the government on Dec. 22 declared the Chinese RMB as primary legal tender in Zimbabwe, economists say that use of the currency is not likely to catch on soon.
Zimbabwean officials announced the decision after China agreed to cancel $40 million in Zimbabwean debt.
But the decision is not likely to change the Zimbabwean economy, experts said.
“The transition to having the RMB circulate as everyday currency in Zimbabwe is going to take a while,” commented Patrick Heller, a numismatic expert with the US-based Liberty Coin Service, in a note published on Dec. 31.
There are little RMB in circulation, he added.
Economist Stewart Hove agreed, pointing out that the dollar has restored economic confidence in the country.
“After the hyperinflation era, confidence has been low, and the dollar stabilized the economy,” Hove said in an interview with Anadolu Agency on Friday. He noted that investors put money into Zimbabwe now because the dollar is a currency unlikely to be devalued.
After suffering years of hyperinflation, Zimbabwe’s own currency failed in January 2009. For five years there was no official legal tender in the nation. The dollar has largely filled the void. In 2014, the government declared the dollar, along with Indian, South African and the Chinese currency as legal tender.
“But how many people are going to use the Chinese currency, considering what happened with our own money in 2009,” said Zimbabwean economist John Robertson, in an interview with Anadolu Agency on Friday.
“We understand the Chinese RMB was legally introduced in January 2014 but never circulated, because the money was never there, Robertson explained.