"Now, be aware instead of jumping in joy when the government announce higher denomination note(s) to be introduced into the country."
Debts & Deficits: 21 Сurrencies That Have Gone Bust
#21) Zimbabwe – 100 Trillion Dollar, 2006
Zimbabwe Government under President Robert Mugabe issued a 100 billion dollar bank note in July 2008. In January 2009, however, a 100 Trillion Dollar note was released – Zimbabwe’s highest denomination note and the biggest ever produced for legal tender. This instantly made Zimbabwe a country that produced bank note with the most zeroes (14 zeroes). Interestingly the 100 Trillion Dollar note, which was worth about US$5, couldn’t buy a bus ticket in the capital of Harare. However 100 Trillion Dollar which was equivalent to about US$300 could buy a loaf of bread.
At independence in 1980, the Zimbabwe dollar (ZWD) was worth about US$ 1.25. However, rampant inflation and the collapse of the economy (corruption) have severely devalued the currency, causing many organisations to favour using the US dollar or South African rand instead. Inflation was stable until President Mugabe began a program of land reforms that primarily focused on taking land from white farmers and redistributing those properties and assets to black farmers – this in turn sent food production and revenues from export of food plummeting.
By 2004, Zimbabwe started to experience chronic inflation. It’s Inflation reached 624% in 2004, then fell back to low triple digits before surging to a new high of 1,730% in 2006. By June 2007, inflation in Zimbabwe had risen to 11,000% year-to-year from an earlier estimate of 9,000%. Reserve Bank of Zimbabwe took the easy way by issuing bank notes or “bearer cheques” with face value from ZWN 100 million to 100 billion. Meanwhile, inflation officially surged to 2,200,000% with some analysts estimating figures surpassing 9,000,000% (please don’t fell off your chair, *grin*).
As of 22 July 2008 the value of the ZWN fell to approximately 688 billion per 1 USD. On 19 August 2008, official figures announced for June estimated the inflation over 11,250,000% and by July, the inflation skyrocket to 231,000,000% (prices doubling every 17.3 days). Eventually it was calculated that Zimbabwe’s monthly inflation peak at the rate of 79.6 billion percent or 98% daily rate – prices were doubling every 24.7 hours. Now, we now why Malaysian former dictator Mahathir Mohamad loves Robert Mugabe so much.
Mahathir was simply thrilled with the capability of Mugabe in managing Zimbabwe’s economy, although it failed to surpass Hungary’s 1946 inflation world record. Birds of the same feather flock together, huh? Now, be aware instead of jumping in joy when the government announce higher denomination note(s) to be introduced into the country.
- Saiful Izham Hassan
