Since 2009, Zimbabwe has used other
currencies in lieu of its own, which it abandoned after hyperinflation of more
than 5,000 percent made it essentially worthless.
This system of using multiple
currencies has led to a deflation rate of -2.3%, according to Zimbabwe's bank
governor.
"We changed to a multiple
currency system to stabilize, and inflation went down to 0% and it was
magic," said the Zimbabwe Reserve Bank Governor, John Mangudya.
Z$100,000,000,000,000
Zimbabwe used to have a
Z$100,000,000,000,000 note - one trillion Zimbabwean dollars.
The note, along with previous
hyper-inflated denominations including Z$10,000,000,000,000 (ten trillion) and
Z$1,000,000,000,000 (one trillion), could be exchanged for U.S. dollars until
the end of April 2016, but it was worth only about $0.40. It is fetching
significant higher prices as a novelty item on websites such as eBay.
When inflation hit 230,000,000
percent in 2009 , the country's reserve bank -- infamous for its inability to
contain sky-high hyperinflation -- declared the U.S. dollar as its official
currency.
From excessively high inflation to
-2.3% deflation, Mangudya remembers the tough years vividly. "It was so
traumatizing," he admitted. "We didn't have the tools to fight the
monster that the economy was facing at the time."
The country had to keep printing
money. Prices would change by the minute, causing stress revolving around the
fluctuations, one of the devastating effects of hyperinflation.
Dollar
is king
The U.S. dollar is the preferred
currency in Zimbabwe at present, but others are welcome.
"We are saying that since you
can import/export goods from South Africa you can use the rand. If you are
importing from China you can use the yuan. The U.S. dollar is our reserve
currency," explained Mangudya.
Zimbabwe seems years away from reintroducing its
own currency. In the meantime, it has coins called bonds.
Seems
the more things change, the more that going back to the basics is the only
option
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