Thursday August 28, 2008

Zimbabwe chops 10 zeroes from currency notes as hyperinflation rolls on

This article belongs to the Zimbabwe inflation watch story arc.

sabcnews.com, africa.reuters.com :

Zimbabwe rolled out a new set of banknotes and coins on Friday [1 Aug 2008] to ease the impact of a ravaging economic crisis, but for many people the move was merely confirmation that authorities have lost the battle against inflation. Official inflation stood at 2.2 million percent, the world's highest. Zimbabwe central bank governor Gideon Gono announced that the currency would be re-denominated by removing 10 zeros from the Zimbabwe dollar. The highest note was 100 billion. The new set of notes range from Z$1 to Z$500. Critics accuse Robert Mugabe of destroying one of Africa's most promising economies with controversial policies, and see no hope for the country without a change in government. John Robertson, a leading Zimbabwean economic consultant, said the new banknotes would have no impact on an economy which has shrunk by almost two thirds over the past decade.

- If nothing is changed, the new notes will be worthless in a matter of weeks or even less, given the hyperinflationary environment where prices increase in exponential fashion. Changing the currency bankotes by itself accomplishes nothing if the financial and economic systems continue to be broken, and if the underlying problems are not fixed they will have to start adding zeroes again.

See also :

1. Zimbabwe adds $500 million dollar note as hyperinflation runs on
2. Runaway hyperinflation : Zimbabwe inflation rate now over 1 million percent
3. Runaway hyperinflation : Zimbabwe inflation rate hits 2.2 million percent officially
4. Hyperinflation : Zimbabwe introduces $100 billion dollar banknotes

(2008-08-28 10:30:15 SGT) [Biz] Permalink

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