Zimbabwe dumps its currency

Date: June 14, 2015

USD RBZ Hyperinflation

Zimbabwe offers new exchange rate: $1 for 35,000,000,000,000,000 old dollars

Zimbabweans will start exchanging “quadrillions” of local dollars for a few US dollars next week as President Robert Mugabe’s government discards its virtually worthless national currency.

The southern African country started using foreign currencies including the US dollar and South African rand in 2009 after the Zimbabwean dollar was ruined by hyperinflation, which hit 500 billion per cent in 2008.

At the height of the country’s economic crisis, Zimbabweans had to carry plastic bags bulging with banknotes to buy basic goods. Prices were rising at least twice a day.

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Residents have time until September to exchange their old bank notes. This process will legally end local dollars.

In 2008, RBZ printed 100 trillion Zimbabwean dollars bank notes. The RBZ said customers who still have stashes of old Zimbabwean dollar notes can walk into any bank and get $1 for every 250 trillion they hold.

This means USD $1 will cost 35, 000,000,000,000,000 Zimbabwean dollars.

Hyperinflation:- 

Hyperinflation is an extremely rapid period of inflation, usually caused by a rapid increase in the money supply. Usually due to unrestrained printing of fiat currency. It occurs when there is a large increase in the money supply not supported by gross domestic product (GDP) growth, resulting in an imbalance in the supply and demand for the money. Left unchecked this causes prices to increase, as the currency loses its value.