Zimbabwe

In Zimbabwe inflation rose from an annual rate of 32% in 1998, to an official estimated high of 11,200,000,000% in August 2008 according to the country's Central Statistical Office. This represented a state of hyperinflation, and the central bank introduced a new 100 billion dollar note. As of November 2008, unofficial figures put Zimbabwe's annual inflation rate at 516 quintillion per cent, with prices doubling every 1.3 days. Zimbabwe's inflation crisis is now (2009) the second worst inflation spike in history, behind the hyperinflationary crisis of Hungary in 1946, in which prices doubled every 15.6 hours. By 2005, the purchasing power of the average Zimbabwean had dropped to the same levels in real terms as 1953. Local residents have largely resorted to buying essentials from neighbors - Botswana, South Africa and Zambia. In 2005, the government, led by central bank governor Gideon Gono, started making overtures that white farmers could come back. There were 400 to 500 still left in the country, but much of the land that had been confiscated was no longer productive. In January 2007, the government even let some white farmers sign long term leases. But, the government reversed course again and started demanding that all remaining white farmers leave the country or face jail. In August 2006, a new revalued Zimbabwean dollar was introduced, equal to 1000 of the prior Zimbabwean. The exchange rate fell from 24 old Zimbabwean dollars per U.S. dollar (USD) in 1998 to 250,000 prior or 250 new Zimbabwean dollars per USD at the official rate, and an estimated 120,000,000 old or 120,000 revalued Zimbabwean dollars per US dollar on the parallel market, in June 2007. In January, 2009, Zimbabwe introduced a new Z$100 trillion banknote. On January 29, in an effort to counteract his country's runaway inflation, acting Finance Minister Patrick Chinamasa announced that Zimbabweans will be permitted to use other, more stable currencies (e.g. Sterling, Euro, South African Rand and the United States Dollar) to do business, alongside the Zimbabwe dollar. On February 2, 2009, the RBZ announced that a further 12 zeros were to be taken off the currency, with 1,000,000,000,000 (third) Zimbabwe dollars being exchanged for 1 new (fourth) dollar. New banknotes are to be introduced with a face value of Z$1, Z$5, Z$10, Z$20, Z$50, Z$100 and Z$500.The banknotes of the fourth dollar were to circulate alongside the third dollar, which remained legal tender until 30 June 2009.