The easing and ending of the Zimbabwe dollar

Friday, 14 September, 2012

When Zimbabwe achieved independence from Britain in April 1980, its revolutionary rulers decided to replace the Rhodesian dollar with the new Zimbabwe dollar (ZWD) at par and it was valued at US$1.54. But tyranny and turmoil soon replaced law and order as the “comrades” warmed to statism and inflation inevitably followed.

By 2007, the ruin that Robert Mugabe and his apparatchiks had wrought led to the issuing of the Z$500,000 note, signaling the official arrival of hyperinflation (more than 50 percent inflation per month). In January 2009, Zimbabwe issued the 100 trillion dollar note, the largest denomination banknote ever. It was the beginning of the end for the currency. A month later, the Reserve Bank of Zimbabwe introduced the fourth Zimbabwe dollar, which lopped off 12 zeros and was worth 1 trillion ZWR (third dollar) and 10 septillion “first dollar” ZWD. But the people had had enough and the use of the Zimbabwean dollar as an official currency was effectively abandoned. Today, the US dollar, the South African rand and the Botswana pula are the currencies of Zimbabwe.

Unlike the criminally inept Reserve Bank of Zimbabwe, the Fed knows what it’s doing. Still, this might be the right time to invest in gold. Just in case Ben has lost the plot.

Zimbabwe dollar

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