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At one point, the US Ambassador to Zimbabwe predicted that it would reach 1. In June the annual rate of price growth was The worst of the inflation occurred in , leading to the abandonment of the currency.

The Old Mutual Implied rate was widely adopted benchmark rate for unofficial currency exchange until intervention by the Reserve Bank of Zimbabwe in May to prohibit the transfer of shares in Old Mutual, ABC and Kingdom Meikles Africa out of the country, therefore stopping their fungibility. Adaptations[ edit ] Use of foreign currencies[ edit ] In , the government declared inflation illegal.

Anyone who raised the prices for goods and services was subject to arrest. This amounted to a price freeze , which is usually ineffective in halting inflation. Many businesses and street vendors continued to do so without getting the license. Citizens were allowed to use the US dollar, the euro , and the South African rand. However, teachers and civil servants were still being paid in Zimbabwean dollars. Note the logarithmic scale.

Prices in shops and restaurants were still quoted in Zimbabwean dollars, but were adjusted several times a day. Any Zimbabwean dollars acquired needed to be exchanged for foreign currency on the parallel market immediately, [37] or the holder would suffer a significant loss of value. For example, a mini-bus driver charged riders in Zimbabwean dollars, but different rates throughout the day: The evening commute was highest-priced.

He sometimes exchanged money three times a day, not in banks but in back office rooms and parking lots. Such business venues constituted a black market , an arena explicitly outside the law. Transactors could evade the price freezes and the mandate to use Zimbabwean dollars.

The black market served the demand for daily goods such as soap and bread, as grocery stores operating within the law no longer sold items whose prices were strictly controlled, or charged customers more if they were paying in Zimbabwean dollars. The government did not attempt to fight inflation with fiscal and monetary policy. In , before hyperinflation reached its peak, the bank announced it would print larger bills to buy foreign currencies.

First, in August , the Reserve Bank recalled notes in exchange for new notes with three zeros slashed from the currency. The same was true for businesses as well and all traders. Solutions[ edit ] A solution effectively adopted by Zimbabwe was to adopt some foreign currency as official.

To facilitate commerce, it is less important which currency is adopted than that the government standardise on a single currency. The US dollar, the euro, and the South African rand were candidates; the US dollar had the most credibility and was the most widely traded within Zimbabwe. Since then Zimbabwe has used a combination of foreign currencies, mostly US dollars. The coins extend the use of the dollar as a de facto currency, and indeed the National Bank has repeatedly assured that it does not intend to bring back a national currency.

Some citizens disputed this, saying the error was now returning and they would not accept the bond notes. Demonetization[ edit ] In June , the Reserve Bank of Zimbabwe said it would begin a process to "demonetise" i.

The plan was to have completed the switch to the US dollar by the end of September

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At one point, the US Ambassador to Zimbabwe predicted that it would reach 1. In June the annual rate of price growth was The worst of the inflation occurred in , leading to the abandonment of the currency. The Old Mutual Implied rate was widely adopted benchmark rate for unofficial currency exchange until intervention by the Reserve Bank of Zimbabwe in May to prohibit the transfer of shares in Old Mutual, ABC and Kingdom Meikles Africa out of the country, therefore stopping their fungibility.

Adaptations[ edit ] Use of foreign currencies[ edit ] In , the government declared inflation illegal. Anyone who raised the prices for goods and services was subject to arrest. This amounted to a price freeze , which is usually ineffective in halting inflation. Many businesses and street vendors continued to do so without getting the license.

Citizens were allowed to use the US dollar, the euro , and the South African rand. However, teachers and civil servants were still being paid in Zimbabwean dollars. Note the logarithmic scale. Prices in shops and restaurants were still quoted in Zimbabwean dollars, but were adjusted several times a day. Any Zimbabwean dollars acquired needed to be exchanged for foreign currency on the parallel market immediately, [37] or the holder would suffer a significant loss of value.

For example, a mini-bus driver charged riders in Zimbabwean dollars, but different rates throughout the day: The evening commute was highest-priced. He sometimes exchanged money three times a day, not in banks but in back office rooms and parking lots. Such business venues constituted a black market , an arena explicitly outside the law. Transactors could evade the price freezes and the mandate to use Zimbabwean dollars. The black market served the demand for daily goods such as soap and bread, as grocery stores operating within the law no longer sold items whose prices were strictly controlled, or charged customers more if they were paying in Zimbabwean dollars.

The government did not attempt to fight inflation with fiscal and monetary policy. In , before hyperinflation reached its peak, the bank announced it would print larger bills to buy foreign currencies. First, in August , the Reserve Bank recalled notes in exchange for new notes with three zeros slashed from the currency. The same was true for businesses as well and all traders.

Solutions[ edit ] A solution effectively adopted by Zimbabwe was to adopt some foreign currency as official.

To facilitate commerce, it is less important which currency is adopted than that the government standardise on a single currency. The US dollar, the euro, and the South African rand were candidates; the US dollar had the most credibility and was the most widely traded within Zimbabwe.

Since then Zimbabwe has used a combination of foreign currencies, mostly US dollars. The coins extend the use of the dollar as a de facto currency, and indeed the National Bank has repeatedly assured that it does not intend to bring back a national currency. Some citizens disputed this, saying the error was now returning and they would not accept the bond notes.

Demonetization[ edit ] In June , the Reserve Bank of Zimbabwe said it would begin a process to "demonetise" i. The plan was to have completed the switch to the US dollar by the end of September

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