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The 100 Billion Dollar Note
Beaten down by hyperinflation, which is when prices rise dramatically and currency loses value, Zimbabwe’s economic situation looks bleak at best. The Reserve Bank of Zimbabwe (RBZ) has a history of conforming to the central government’s poor economic policy (ahem, Mugabe) and their money machine has been running on overtime.
Inflation rose from 165,000 percent in February to 2.2 million percent in June, according to the AFP. To put that in simpler terms, 1 U.S. dollar equals roughly 18,681,527,512.36 ZWD. It’s no wonder why 80% of the population is below the poverty line.
The 100 Billion Dollar Note was brought in recently to combat crippling cash shortages. It may sound preposterous, but 100 billion Zimbabwe dollars barely buys a loaf of bread. The note is gaining notoriety on eBay, where its $80 USD selling price is around 40 times more than the note’s worth.
Wondering what some popular U.S. items cost in Zimbabwe terms? See the chart below.
Steve H. Hanke, a professor of applied economics at John Hopkins University, writes that Zimbabwe has three ways to start fixing this catastrophe: dollarization, a currency board, and a free banking system (as opposed to the failed Central Banking System). However, as long as Zimbabwe remains in political turmoil, its citizens are likely to grow poorer and poorer.
Note: Exchange rate calculations based on rates provided by www.xe.com.
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