Zimbabwe's Currency Woes
Latest Developments
A new currency called Zimbabwe gold is launched. All Zimbabwean dollars are converted to the new gold-backed currency.
A new Central Bank governor, John Mushayavanhu, is appointed for a five-year term.
The United States ends its old sanctions program on Zimbabwe while issuing more targeted sanctions on the president, first lady and others.
Spotlight
Pandora’s Lunchbox: How School Fees Embody the Chaos of Zimbabwe’s Currency System
MUTARE, ZIMBABWE — Mary Mlambo’s daughters were looking forward to the second-term reopening of Zimbabwe’s schools in early May 2023. Clad in their winter uniforms — trousers instead of the usual skirts or dresses — and bundled up in blazers, jerseys and scarves, the two girls resumed classes at their respective schools.
Having bought all required reading and writing materials, Mlambo, a government employee, was comfortable knowing the only thing she still had to pay was their school fees.
Mlambo always pays fees for her children within a few days of schools reopening. On her first visit to the school, she was told the point-of-sale machine used for card payments wasn’t working.
“I went home and came back the next day to be told there were network challenges with the banking system,” says Mlambo, who on her third visit encountered the same hurdles.
Background
An Inside Look at Zimbabwe’s Chaotic Economy
Zimbabwe, once known as the breadbasket of Africa, won independence in 1980. But the next two decades of government overspending, corruption, one-party rule and rocky reforms — namely the chaotic land reforms of the 2000s — led to the world’s most severe economic downturn in a country not at war, according to a 2019 report from the African Development Bank.
The devastation was severe. Between 1998 and 2008, during the fallout of the botched land reform, a wave of droughts and extreme hyperinflation hit; Zimbabwe’s gross domestic product was nearly cut in half. At the peak of the crisis in 2008-2009, the Zimbabwean dollar was pulled from circulation and replaced with the United States dollar and a few regional currencies. A period of relative calm followed. But since 2016, the economy has reclaimed its former chaotic streak.
Against the wishes of many, the government raised the Zimbabwean dollar from the dead and has since struggled to prop it up. When the local currency was rolled out again in 2019, a loaf of bread cost between 2 and 3 Zimbabwean dollars. Five years later, a loaf of bread costs 24,000 Zimbabwean dollars (the equivalent of about 1 US dollar). Against the stability of the US dollar, which is still tolerated by the government, many vendors today don’t easily accept payment in Zimbabwean dollars.
Currently, over 4 million people — about 25% of the population — face food insecurity, according to 2023 surveys from the Zimbabwe Vulnerability Assessment Committee.
Current Exchange Rate
$1 USD = 13 ZWL
Last 30 Days
Latest Articles
Historic Timeline
A new gold-backed currency, Zimbabwe gold (ZiG), is launched to replace the old Zimbabwean dollar. While bank accounts, debts, pensions and more are converted to the new currency, people hold their breath to see how ...
The currency, introduced five years earlier with an exchange rate of 1 US dollar to 2.5 Zimbabwean dollars, now stands on the precipice at 1:18,944.
The Zimbabwean dollar crumbles, losing 52% of its value in January. The currency, introduced five years earlier with an exchange rate of 1 US dollar to 2.5 Zimbabwean dollars, is now at 1:9,414.
Despite the government’s efforts, the US dollar overtakes the Zimbabwean dollar as the most used currency. A government survey published in February finds that 77% of expenses are paid with US dollars.
In October, st...
Access to the foreign exchange auction system is expanded so everybody — not just big businesses — can bid for US dollars outside of the more expensive black market.
However, the Zimbabwean dollar has gone into free-...
The central bank opens a foreign exchange auction system, joining 39 countries who use similar systems. The weekly auction serves two main functions: to make it easier for companies to access US dollars and therefore...
On March 26, the exchange rate between US and Zimbabwean dollars surpasses 1:26 — a nearly 1,000% drop in value since the new Zimbabwean dollar was introduced one year earlier. The next day, the central bank fixes th...
The new currency is renamed once again — to the Zimbabwean dollar — after losing over 150% of its value in just four months, echoing the early stages of the hyperinflationary period of a decade earlier.
Use of the US...
The so-called local dollar is renamed — the RTGS dollar — and introduced at a floating rate starting at 1 US dollar to 2.5 RTGS dollars, shattering the myth that it ever held a 1:1 value with the US dollar. Meanwhile...
A new policy is enacted without notice, pulling US dollars from bank accounts overnight and replacing them with digital bond notes, which officials call a “local dollar.” Prices skyrocket and many shop owners refuse ...
During a cash shortage where currency of any kind is tough to find, the government prints bills called bond notes. These bond notes, according to the government, hold a 1:1 value with the US dollar, but in reality th...
In February 2009, the runaway Zimbabwean dollar is pulled from the printers and the government introduces a multi-currency system. US dollars, South African rand and other foreign currencies dominate the marketplace,...
With prices doubling every day, in November 2008, inflation peaks at 89.7 sextillion percent — that’s 20 zeroes — making history as the second-highest inflation rate in the world. A $100 trillion note couldn’t even c...
A rushed and chaotic land-reform policy hobbles the economy, leaves farms in ruin and causes foreign investors to pull out of Zimbabwe. By 2007, the Zimbabwean dollar’s monthly inflation rates reach triple digits.
