Zimbabwe has started retiring its almost worthless local currency in favor of the US dollar. Today, 35 quadrillion Zimbabwean dollars are equal to US $1, as a result of hyperinflation which hit the country in 2009.
The demonetization process of the Zimbabwe dollar started on Monday and will run till September 30.
People with accounts of up to 175 quadrillion (175,000,000,000,000,000) Zimbabwean dollars will be paid $5. Those who preserved bills at home will receive a rate of 250 trillion to $1 for their 2008-issued notes and 250 to $1 for their 2009-issued notes.
“We need to safeguard the integrity of the multiple currency system or dollarization in Zimbabwe,”John Mangudya, chief of the Reserve Bank of Zimbabwe was cited as saying by Africa Report.
“Demonetization is, therefore, critical for policy consistency and for enhancing consumer and business confidence,” he added.
Demonetization is an important and necessary process to comply with the multiple currency system, according to the Reserve bank.
In 2008 the monthly inflation rate hit 3.5 million percent with an egg costing 50 billion Zimbabwean dollars. A loaf of bread then cost as much as 12 new cars could have cost 10 years before. Prices doubled every 25 hours, which gave Zimbabwe the second-worst hyperinflation in history, behind post-war Hungary. The same year, Zimbabwe printed its highest denomination banknote, at 100 trillion dollars it was only enough to buy a weekly bus ticket.