Dropping The Zeros: Zimbabwe Takes Local Currency Out Of Circulation

Dropping The Zeros: Zimbabwe Takes Local Currency Out Of Circulation

The Zimbabwean government has officially announced that it will discard all the Zimbabwean dollars and make the US dollar the main currency of use in the Southern Africa economy, after hyper-inflation rendered the local currency nearly worthless.

The country’s central bank said it will convert all bank balances less than 175 quadrillion Zimbabwean dollars (or 175, 000,000,000,000,000) to $5 and those above the minimum amount will be exchanged at $1 to 35 quadrillion Zimbabwean dollars.

Account holder have until end of September to exchange their notes, after which the local currency will become useless.

“We are decommissioning this currency,” DW quoted the Reserve Bank of Zimbabwe governor John Mangudya saying at a news conference.

“Zimbabwe adopted the multiple currency system, or dollarization in 2009 and it is therefore necessary to demonetize the Zimbabwe dollar unit,” he added.

Zimbabwe, which was once referred as the “breadbasket of Africa” due to the abundance of food its mostly white farmers exported to other nations, started using foreign currencies like the US dollar and the South African rand in 2009, after the local currency got ruined by hyper-inflation.

The country’s economic crisis hit a bottom in 2008, when the inflation rate sky rocketed to 500 billion percent. Zimbabweans had to carry bagfuls of banknotes to the shops to buy basic goods like bread and milk, while prices doubled at least twice a day.

There are at least eight foreign currencies that are used as legal tender in the country including the Australian dollar, British pound sterling, Botswana pula, the Euro, Indian rupee, Chinese yuan and Japanese yen.