10 billion dollars becomes a dollar in Zimbabwe

Wednesday, July 30, 20082comments

Beset by political chaos and runaway price inflation, Zimbabwe is stripping 10 zeros off its nearly worthless currency so that 10 billion dollars becomes a dollar, news agencies reported Wednesday.

The country's central bank chief, who announced the move in a television broadcast, said the big numbers were causing problems for computer systems, the BBC said.
"The Zimbabwe dollar will be redenominated by a factor of one to 10, which means we are removing 10 zeros from our monetary value," Gideon Gono, governor of the Reserve Bank of Zimbabwe, said in the broadcast. "Ten billion dollars today will be reduced to one dollar."
Computers, calculators and automated teller machines have been unable to handle basic transactions in billions and trillions of dollars, the Associated Press reported, adding that Gono just last week introduced a 100-billion-dollar note that is not enough to buy a loaf of bread.
The new currency numbering takes effect Aug. 1 with the issue of a 500-dollar bill equivalent to five trillion now. Zimbabwe's official inflation rate, highest in the world, is 2.2 million per cent a year.

Inflation in Zimbabwe has broken all the records and is first such country of the list where inflation has reached to an uncountable percentage. In March 2008, inflation was 3,55,000 per cent, which was the double of the inflation in February 2008, when it was 1, 65,000 per cent. We have to say thanks to the Country’s Central Bank (CCB) and the people who are involved in inflation calculation. How they are able to calculate the 3, 55,000 per cent inflation is out of the intelligence of normal people.

What does this level of inflation in Zimbabwe mean to the poor residents of the country? It means that Zimbabweans are purchasing a sandwich for Zimbabwean $50 million, sounds crazy? One kg of potatoes cost Zimbabwean $17 million. Effectively, this means that the value of Zimbabwean dollar has reached almost to zero. Hence 50-million Zimbabwean dollar equals to only1 US$… really only one US$. And also, 50 million Zimbabwean dollar equals to almost 42 Indian rupees.

On May 2, 2008, Reserve Bank of Zimbabwe (RBZ) issued currency note of 500 million dollars, which had an expiry date. Once again a crazy talk? But true, the Zimbabwean $50, 0000000.00 will be a bearer cheque with validity up to December 31, 2008. After December 31, 2008, no body can accept it.
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