Zimbabwe vs Inflation
“dzimba-mabwe” in the Shona language roughly translates to Stone houses or Houses made of stones, which is presumed to be the precursor word for the name Zimbabwe. Becoming an independent nation relatively recently in the 1980s, it was previously called “Rhodesia” during the British Colonial period, saw its currency suffering from double to triple-digit inflation leading to Hyperinflation in modern history second only to the infamous Hungary’s hyperinflation of 207% per day in the year 1946.
Due to bad administration and controversial economic reforms, the Zimbabwe Dollar which was more valuable than the US Dollar at the beginning of its independence at 1 ZWD = 1.47 USD, started to lose its value and was re-denominated 3 times before it was demonetized in 2008 due to uncontrollable hyperinflation and ridiculously high denomination bills as high as 100 trillion ZWD bill which was equivalent to 300 USD at that time.
In July 2006, 500000 ZWD = 1 USD. In July 2006, they did a currency redenomination of 1000 ZWD = 1 ZWN.
In July 2008, 758 billion ZWN = 1 USD. In the same month, another currency redenomination took place making 10 billion ZWN = 1 ZWR
By Feb 2009, 300 trillion ZWR = 1 USD. Again, in the same month, another 12 zeros were removed and a third redenomination took place which made 1 trillion ZWR = 1 ZWL making the fourth dollar (ZWL) is equivalent to 10,000,000,000,000,000,000,000,000, or 1×10²⁵ or 10 septillion first dollars (ZWD)
By April of 2009, the Zimbabwe dollar was abandoned and the USD along with 9 currencies including INR was made legal tender.
If Zimbabwe Dollar never underwent redenomination, 1 USD would be equal to 1X10³³ ZWD or 1,000,000,000,000,000,000,000,000,000,000,000 ZWD.(Cited from: https://www.cointalk.com/threads/zimbabwe-bills.257426/)
Here are some of the receipts shared on the internet.
A Mineral Water Bottle costing 95 Million ZWN.
A Dinner costing up to a trillion ZWN.
The hyperinflation caused people to carry cash in sacks, wagons and carts for spending as money value depreciated tremendously.
Here’s another receipt from 2 months earlier showing a 500 ml water bottle costing 3 million ZWN compared to the previous receipt of 95 million ZWN for a bottle. This is how the daily and monthly inflation percentages skyrocketed.
Currently, a new currency RTGS (Real Time Gross Settlement Dollar) was introduced in 2019 after almost a decade of banning inflation and the Zimbabwe dollar in 2009. Even that couldn’t stop the story of never-ending inflation. With Covid stressed economy, the new currency reached yearly inflation of 610% in 2020.
After a steady year of declining inflation in 2021, the last elected (2017) President Emmerson Mnangagwa after a coup d’état overthrowing the previous leader of Zimbabwe Robert Mugabe (Prime Minister from ‘80-’87 and President from ’87 to ’17), recently announced a controversial economic reform by banning banks from lending!
“Lending by banks to both the government and the private sector is hereby suspended with immediate effect, until further notice,” Mnangagwa said in a statement.
Despite multiple redenomination and demonetization, economic reforms, With YoY inflation soaring from 60.6% in January 2022 to 96.4% in April 2022 and the ZWL (RTGS) trading around 330 to 400 for 1 USD on the black market, the future of the country looks bleak as it was for the past 3 decades.