John Mangudya. Picture: REUTERS
John Mangudya. Picture: REUTERS

Harare — Zimbabwe’s central bank said on Tuesday that it will introduce a new currency within two weeks to ease a cash shortage that have affected the ailing economy.

The country has been plagued by a shortage for the past three years with most ATMs no longer doling out cash.

“We are going to be releasing the currency, coins and notes ... to ensure we don’t starve this market. Within the next two weeks we will have the cash,” John Mangudya, Zimbabwe’s central bank governor said at a news conference in Harare.

Mangudya was presenting a statement of the central bank’s monetary policy committee that was set up to find solutions to the country economic crisis.

“The committee felt there was a need to boost the domestic availability of cash in the economy for transactional purposes through a gradual increase in cash supply over the next six months,” he said. “This additional cash injection will be carried out through the non-inflationary exchange of real-time, gross settlement money for physical cash.”

He said the new currency will be circulated together with the bond notes — a pseudo-currency that the country has been using for transactions.  “The new currency won’t have be called bond notes — just two dollars [or] five dollars.”

Zimbabwe is experiencing its worst economic crisis in a decade, with inflation at more than 300% and is also plagued by a shortage of foreign currency, fuel, electricity and basic foods.

The country is also in the grips of a currency crisis as the local currency, which was, at one time, pegged at 1:1 with the US dollar is now trading at 1:20 with the greenback.