EDITORIAL: Zimbabwe runs out of ideas
It’s almost like Zimbabwe’s government has forgotten 2009, when, under the weight of the second-worst hyperinflation numbers yet recorded, the Zim dollar was abandoned
After trying everything else in vain, why not go back to the beginning and try the first thing you failed at again. This is the message from Zimbabwe’s government, which has reintroduced its own currency and declared it the only legal tender.
It’s almost like it has forgotten 2009, when, under the weight of the second-worst hyperinflation numbers yet recorded, the Zim dollar was abandoned.
Back then Zimbabwe tried and failed to print itself out of a severe recession brought about by expropriation without compensation.
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Then it tried using a basket of currencies — the rand, the pula, the US dollar, sterling and the Chinese yuan — before, in 2016, introducing "bond notes" to address a chronic shortage of the real thing. It said this currency was backed by a $200m loan from the African Export-Import Bank, and insisted one of these pseudo units was equal to a real dollar. When this didn’t do the trick, this year it introduced the real-time gross settlement (RTGS) dollar, another pseudo currency that it again insisted carried the same value as the greenback.
The market disagreed. Most recently you needed 12 RTGS dollars to buy one US dollar on the black market. The printing presses have again been hauled out of storage. So strap yourself in for another bout of hyperinflation.