The dollar was introduced on 17 February 1970, roughly two weeks before the declaration of a republic on 2 March 1970.

However, the Rhodesian dollar was never a fully convertible currency and its exchange rate was therefore not an indication of the underlying economics.

In adopting the Rhodesian dollar, Rhodesia followed the pattern of South Africa, Australia, and New Zealand in that when it adopted the decimal system, it decided to use the half pound unit as opposed to the pound unit of account.

The choice of the name dollar was favoured by the then Minister of Finance, John Wrathall, who regarded it as having international substance.

On 17 February 1970, the Reserve Bank of Rhodesia introduced notes in denominations of 1, 2 and 10 dollars.