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A cup of coffee? That'll be 35 trillion dollars please (Zimbabwean)

June 12, 2015

The southern African country is finally mopping up what remains of its worthless currency by offering to swap bank deposits or cash for as little as one U.S. dollar per 35 quadrillion Zimbabwean dollars. But if your're thinking that Zimbabweans travel around with wheelbarrows of cash like the bad days of the Weimer Republic, let us assure you that is not

 

the case. Zimbabwean currency these days is denominated in quadrillions (see image).

 

Here is what that looks like in digits: $1 = Z$35,000,000,000,000,000.

 

Zimbabwe abandoned its money in 2009 after hyperinflation destroyed its value. Most transactions since have been conducted in U.S. dollars or South African rand. The Zimbabwean government is still run by the same revolutionaries that seized control of the country in the 1980's when it was called Rhodesia. But as in so many similar cases in that part of the world, revolutionary zeal turned into a mass kleptocracy, and the real domestic product of Zimbabwe withered away to essentially zero. But civil servants still need to be paid and citizens needed currency to buy goods, so the printing presses were started running and they have never stopped.

 

At the peak of the crisis, prices were doubling every 24 hours. Cato Institute economists estimate monthly inflation hit 7.9 billion percent in 2008. There are no official numbers -- the authorities gave up trying to keep track.

 

Unemployment soared and public services collapsed. According to the World Bank, the economy shrank by nearly 18% in 2008.

 

The Zimbabwe dollar was swiftly replaced by foreign currencies, first unofficially, then as part of government efforts to curb inflation and revive the economy. In 2014 the economy stablized and squeezed out a microscopic gain in gross domestic product.

 

 

Zimbabweans have until the end of September to exchange the national currency into dollars before it is no longer legal tender.

 

 

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