The southern African country introduced bond notes in 2016, but the currency - allegedly backed by a US$200 million facility by Afreximbank - has significantly lost value against the United States dollar in the past few months.
At the same time, Zimbabwe's electronic money has also depreciated in value as a result of the central bank's money printing, which is not backed by production.
Akribos Research Services (Akribos) said government's recent decision to separate bank accounts into nostro foreign currency accounts (FCA) and RTGS FCA in a bid to bring back confidence in the market spelt doom for the local payment modes.
The equities research firm added that there was a 95,5 percent chance that bond notes and RTGS-generated cash would cease to be legal tender the same way the Zimbabwean dollar was discarded in 2009 following runaway inflation.
"The currency issue remains a key constraint that has to be dealt with. We see risks in continuing to hold RTGS balances despite several announcements being made to restore confidence in the current system. In the absence of a bail-out package from a major partner (like China) to resolve the issue, we foresee a natural cessation of bond notes/RTGS balances," the firm said in a research note.
This comes at a time when an increasing number of merchants are already rejecting bond notes and RTGS in favour of hard currencies ― bringing back memories of 2008 when the Zimbabwean dollar died a natural death.
Akribos said given the economic environment, it would make sense for investors to park RTGS balances in highly defensive safe-haven stocks.
"We are overweight on consumer-oriented companies, retail companies and agricultural stocks. We are underweight on the insurance sector given the relatively low disposable incomes in the economy. We are also underweight on the manufacturing sector given the working capital constrains hampering growth, foreign product competition weighing on profitability and aged technology leading to high cost of production," the company said.
Although Finance minister Mthuli Ncube said he had secured a guarantee from Afreximbank to convert local RTGS balances ― currently sitting close to $10 billion ― into United States dollars, market analysts argue that the separation of bank accounts was a tacit admission by the central bank that depositors' balances in financial institutions now reflect a virtual local currency and not the greenback.
Economist Gift Mugano said events of the past few weeks confirm that Zimbabwe is on its way to full dollarisation.
"We have reached a point where retailers and manufacturers have engaged in self-dollarisation," he said.
"The question is how practical is it to re-dollarise? The answer is it is not because unlike 2008 where everyone was at zero balances, we have RTGS balances of $9 billion which, if anyone is thinking of dollarising will mean that the same RTGS balances will have to be real hard notes at some point.
"In the same vein, we don't have enough liquidity which can support re-dollarisation if the receipts we have from exports, remittances, foreign direct investments and aid is anything to go by," the Africa Economic Development Strategies executive director said.
Mugano further indicated that the state of the economy requires a massive cash injection to stabilise the gap between RTGS and nostro account balances if the country is to continue using its local currency.
"If we don't get a bailout… or fresh injection of capital we are heading for a sudden crash," he said.
