Zimbabwean dollar
The Zimbabwean dollar was the name of four official currencies of Zimbabwe from 1980 to 12 April 2009. During this time, it was subject to periods of extreme inflation, followed by a period of hyperinflation.
The Zimbabwean dollar was introduced in 1980 to directly replace the Rhodesian dollar at par, at a similar value to the US dollar. In the 20th century the dollar functioned as a normal currency, but in the early 21st century hyperinflation in Zimbabwe reduced the Zimbabwean dollar to one of the lowest valued currency units in the world. It was redenominated three times, with denominations up to a $100 trillion banknote issued. The final redenomination produced the "fourth dollar", which was worth 1025 ZWD.
Use of the Zimbabwean dollar as an official currency was effectively abandoned on 12 April 2009. It was demonetised in 2015, with outstanding accounts able to be reimbursed until 30 April 2016. In place of the Zimbabwean dollar, currencies including the South African rand, Botswana pula, pound sterling, Indian rupee, euro, Japanese yen, Australian dollar, Chinese yuan, and the United States dollar were used.
On 24 June 2019, the Reserve Bank of Zimbabwe abolished the multiple-currency system and replaced it with a new Zimbabwe dollar, which was the only official currency in the country between June 2019 and March 2020, after which multiple foreign currencies were allowed again. On 5 April 2024, the dollar was removed and replaced with what the authorities called "a structured currency backed by gold", named Zimbabwean gold or the ZiG.
Origin
The Zimbabwean dollar's predecessor, the Rhodesian dollar, was essentially equal to half of the value of the pound sterling at the time of its adoption. A similar practice was used in other Commonwealth countries such as South Africa, Australia, and New Zealand. The selection of the name was motivated by the fact that the reduced value of the new unit correlated more closely to the value of the US dollar than to the pound sterling.Design
The main illustration on the obverse of all of the banknotes was the Chiremba Balancing Rocks in Epworth, Harare, which were used as a metaphor demonstrating the importance of balancing development and the preservation of the fragile environment. The reverse side of dollar notes often illustrated the culture or landmarks of Zimbabwe.History
Initial introduction (ZWD)
| Date of redenomination | Currency code | Value |
| 1 August 2006 | ZWN | 1 000 ZWD |
| 1 August 2008 | ZWR | ZWN = ZWD |
| 2 February 2009 | ZWL | ZWR = ZWN = ZWD |
The first Zimbabwean dollar was introduced in 1980 and replaced the Rhodesian dollar at par. The initial ISO 4217 code was ZWD. At the time of its introduction, the Zimbabwean dollar was worth more than the US dollar in the official exchange market, with 1 ZWD =, although this did not reflect the actual purchasing power it held.
The value of the dollar began to erode significantly from August 1991 onwards: originally, this was because of the Economic Structural Adjustment Programme, a programme of economic liberalisation that dismantled a planned "siege" economy from the UDI era. However, the ESAP caused widespread poverty and unemployment, since many of the lost jobs depended on formerly-subsidised exports with reduced global demand. The widespread poverty and unemployment, combined with impromptu spending to support veterans of the Rhodesian Bush War, resulted in a major currency crash on 14 November 1997.
The currency's official and parallel rates continued to plummet in the context in falling incomes from exports, the chaotic redistribution of land to inexperienced farmers, and Zimbabwe's involvement in the Second Congo War. By July 2006, the parallel market value of the Zimbabwean dollar fell to one millionth of a pound sterling.
First re-denomination (ZWN)
In October 2005, the Governor of the Reserve Bank of Zimbabwe at the time, Dr. Gideon Gono, announced that Zimbabwe would have a new currency the following year, and new banknotes and coins would be produced. However, in June 2006, it was decreed that, for a new currency to be viable, Zimbabwe had to first achieve macro-economic stability. Instead, in August 2006, the first dollar was redenominated to the second dollar at the rate of 1000 first dollars to 1 second dollar. At the same time, the currency was devalued against the US dollar, from 101000 first dollars to 250 second dollars, a decrease of about 60%. ISO originally assigned a new currency code of ZWN to this redenominated currency, but the Reserve Bank of Zimbabwe could not deal with a currency change, so the currency code remained 'ZWD'. The revaluation campaign, which Gideon Gono named "Operation Sunrise", was completed on 21 August 2006. It was estimated that some ten trillion old Zimbabwe dollars were not redeemed during this period.The following year, on 2 February 2007, the RBZ revealed that a new dollar would be released. However, with inflation still exceeding 1000%, the banknotes were kept in storage. During the same month, the Reserve Bank of Zimbabwe declared inflation illegal, outlawing any raise in prices on certain commodities between 1 March and 30 June 2007. Officials arrested executives of some Zimbabwean companies for increasing prices on their products, and economists reported that "chaos had started to reign and people in the public sector became frantic". On 6 September 2007, the Zimbabwe dollar was devalued again by 92%, creating an official exchange rate of to, although the black market exchange rate was estimated to be to.
As an official exchange rate became more unreliable, the WM/Reuters company introduced a notional exchange rate which was based on Purchasing Power Parity utilising the dual listing of companies on the Harare and London Stock exchanges.
Second re-denomination (ZWR)
On 30 July 2008, the dollar was redenominated and given a new currency code of ZWR. After 1 August 2008, 10 billion ZWN were worth 1 ZWR. Coins valued at, and and banknotes worth,,,, and were issued in ZWR. Due to frequent cash shortages and the apparently worthless Zimbabwean dollar, foreign currency was effectively legalised as a de facto currency on 13 September 2008 via a special program. This program officially allowed a number of retailers to accept foreign money. This reflected the reality of the dollarisation of the economy, with many shop keepers refusing to accept Zimbabwe dollars and requesting US dollars or South African rand instead. Despite redenomination, the RBZ was forced to print banknotes of ever higher values to keep up with surging inflation, with ten zeros reappearing by the end of 2008. While worthless at the time, these 100 trillion dollar notes subsequently became popular with collectors.Third re-denomination (ZWL)
On 2 February 2009, the RBZ announced that a further 12 zeros were to be taken off the currency, with 1,000,000,000,000 third Zimbabwean dollars being exchanged for 1 new fourth dollar. New banknotes were introduced with face values of,,,,, and. The banknotes of the fourth dollar circulated alongside the third dollar, which remained legal tender until 30 June 2009. The new ISO currency code was ZWL.Despite the introduction of the fourth dollar, however, the problems were not eliminated, and the economy continued to be almost completely dollarised. In his first budget, the Zimbabwe finance minister, Tendai Biti, stated "the death of the Zimbabwe dollar is a reality we have to live with. Since October 2008 our national currency has become moribund". In late January 2009, acting Finance Minister Patrick Chinamasa announced that all Zimbabweans would be allowed to conduct business with any currency, as a response to the hyperinflation crisis. On 12 April 2009, media outlets reported that economic planning minister Elton Mangoma had announced the suspension of the local currency "for at least a year", effectively terminating the fourth dollar.
Withdrawal
Hyperinflation
All four issues of the Zimbabwean dollar experienced high rates of inflation, although it was not until the early 2000s that Zimbabwe started to experience completely unsustainable hyperinflation.On 13 July 2007, the Zimbabwean government said that it had temporarily stopped publishing inflation figures, a move that observers said was meant to draw attention away from "runaway inflation which has come to symbolise the country's unprecedented economic meltdown". In 2008, the inflation rate accelerated dramatically, from a rate in January of over 100,000% to an estimated rate of over 1,000,000% by May, and nearly 250,000,000% in July.
Money supply (2006–2008)
The Reserve Bank of Zimbabwe responded to the dwindling value of the dollar by repeatedly arranging the printing of further banknotes, often at great expense from overseas suppliers.On 1 March 2008 The Sunday Times reported that it had obtained documents showing that the Munich company Giesecke & Devrient was receiving more than €500,000 a week for delivering bank notes to the value of Z$170 trillion a week. By late 2008, inflation had risen so high that automated teller machines for one major bank gave a "data overflow error" and stopped customers' attempts to withdraw money with so many zeros.
In June 2008, U.S. officials announced they would not take any action against G&D.
It was reported that on 1 July 2008 the company's management board decided to cease delivering banknote paper to the Reserve Bank of Zimbabwe with immediate effect. The decision was in response to an "official request" from the German government and calls for international sanctions by the European Union and the United Nations.