Zimbabwe: a Worthless Currency

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Zimbabwe: A worthless currency | The Economist



A worthless currency
The local dollar is fast shrivelling away
Jul 17th 2008 | JOHANNESBURG | from the print edition

WITH prices doubling every few days, Zimbabweans now spend huge amounts of time and energy preventing their meagre cash resources from completely evaporating. Trying to catch up with galloping hyperinflation, now officially running at 2.2m per cent a year and at least four times faster in reality, the central bank has been printing ever bigger denominations. But it is outrun by galloping prices: at last count, the most valuable The tragi-comedy banknote available was for 50 billion continues EPA Zimbabwean dollars, now worth barely 70 American cents on the black market, and the stock of Zimbabwean dollars is dwindling. Local cash could become scarcer still, now that the German company that was providing Zimbabwe with paper to print its banknotes has cancelled its contract; the Zimbabwean monetary authorities are likely to turn to a less specialised supplier. Meanwhile, people do not even bother to pick up notes of hundreds of thousands on the pavements of Harare, the capital. At independence in 1980, the Zimbabwe dollar was more valuable than the American greenback. It may seem odd that the local currency is still used at all. From Z$25 billion to the American dollar at the beginning of this month, the cash exchange rate had jumped threefold within a fortnight. In restaurants or shops, prices are still quoted in local currency but revised several times a day. Salaries are paid in Zimbabwean dollars, still the only legal tender. A minibus driver taking commuters into Harare every day

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29/10/2012 9:56 PM

Zimbabwe: A worthless currency | The Economist


still charges his clients in Zimbabwe dollars—but at a higher price on the evening trip home—and changes his local notes...
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