Zimbabwe: The economy is in a mess
Zimbabwe has gone from one economic crisis to another over the last decade. Estimates of the country’s unemployment levels vary, but the country’s biggest trade union claims the jobless rate was as high as 90% earlier this year.
Zimbabwe has struggled with hyperinflation, which peaked in 2008. The country was forced to abandon its own currency at a rate of Z$35 quadrillion to US$1, adopting the use of foreign cash.
Because of a continuing chronic shortage of hard money, the government issued their own version of dollars called bond notes, but they have rapidly lost their value.
People with money stored electronically in banks are unable to access it, or are subject to strict limits on what they can withdraw. Because of this, crypto-currencies that are traded online have risen in popularity. Following the news of the military takeover, Bitcoin prices in Harare surged on Wednesday.
The third dollar rates above are OMIR. The cash rate differs significantly to the above rates. The table below is the cash rate of the third dollar history:
|Month||ZWR per USD|
|Sept 2008||1 000|
|Oct 2008||90 000|
|Nov 2008||1 200 000|
|Mid Dec 2008||60 000 000|
|End Dec 2008||2 000 000 000|
|Mid Jan 2009||1 000 000 000 000|
|2 February 2009||300 000 000 000 000|
On 2 February 2009, the RBZ removed 12 zeros from the currency, with 1,000,000,000,000 (third) Zimbabwe dollars being exchanged for 1 new (fourth) dollar. Although the dollar was abandoned on 12 April 2009, exchange rates were maintained at intervals for some months. Therefore, the fourth dollar would be worth 200,000,000,000,000,000,000,000,000,000,000,000, or 2×1035 first dollars if never revalued.
On 4 June 2015, it was announced that the Reserve Bank of Zimbabwe would exchange some of the old banknotes for US dollars.
A selection of Reserve Bank of Zimbabwe bearer cheques printed between July 2007 to July 2008 (now expired) that illustrate the hyperinflation rate in Zimbabwe.