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Hyperinflation kills off Zimbabwe dollar

Monday, June 15, 2015 - 01:55

Zimbabwe's central bank will start to take the Zimbabwean dollar out of circulation. As Sonia Legg reports it became worthless after the introduction of various currencies, mainly the US dollar, to slow hyperinflation.

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175 quadrillion Zimbabwean dollars - worth just $5 U.S. ones. That's the going exchange rate for the now officially defunct currency. Hyperinflation ravaged the local dollar until it hit 500 billion percent in 2008. The government was forced to allow the use of foreign currencies, like the U.S. dollar Christopher Mugaga is CEO of Zimbabwe's Chamber of Commerce. SOUNDBITE (English ) CHRISTOPHER MUGAGA, CEO, ZIMBABWE NATIONAL CHAMBER OF COMMERCE SAYING: "A lot of people were quite aggrieved as they felt they lost a lot of money after we had converted in 2009 to United States dollars. As a chamber of commerce we believe this could be the right move by the government in trying to restore sanity." Fifteen years ago the economy was plunged into crisis when Robert Mugabe's government started a campaign of violent seizures of white-owned commercial farms. They were distributed to black subsistence growers and as a result exports of tobacco and other crops were slashed. The economy shrank, creating a recession that lasted until 2009. So can Zimbabwe return to its financial glory days any time soon? Peter Dixon of Commerzbank says No. (SOUNDBITE) (ENGLISH): Peter Dixon, Global Financial Economist, Commerzbank, SAYING: "It is a kleptocracy. It has been allowed to fall apart and it has been mismanaged and foreign investors have pulled out. Until such times as you see significant reform of the economy of the government process which will attract foreign investors back into the market I am afraid Zimbabwe, far from being the bread basket of Africa, is likely to remain a basket case." Zimbabweans have until September to trade in any old currency - if they can carry them to the bank. But they might be better off auctioning them on eBay. A 100 trillion Zimbabwe dollar note is fetching bids of $35 - far more than the 40 cents on offer at the central bank.

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Hyperinflation kills off Zimbabwe dollar

Monday, June 15, 2015 - 01:55