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article imageZimbabwe's new exchange rate: $5 for 175 quadrillion local ones

By James Walker     Jun 12, 2015 in World
Zimbabwe has announced it will be phasing out its own local currency in favour of the US dollar. The Zimbabwean dollar has been subject to hyperinflation of up to 500,000,000,000 percent so that locals will get $5 USD for 175 quadrillion local dollars.
The BBC reports that Zimbabweans will be able to take advantage of this offer from Monday. Bank accounts with up to 175 quadrillion Zimbabwean dollars will receive $5USD added to them while anybody with a balance higher than this will receive another $1 for every 35 quadrillion Zimbabwean dollars.
The currency has not been used since around 2009, with the U.S. dollar and South African rand typically being used instead. Locals often sell the notes to tourists as souvenirs.
Bloomberg writes that the inflation began in 2000 when the government aggressively seized commercial farms from white people and gave them to black subsistence growers. Zimbabwe's primary exports of tobacco and other agricultural crops were slashed, inflation surged and a decade-long recession began until a coalition government gained control in 2009.
The Guardian notes that the last note printed by the Reserve Bank of Zimbabwe in 2008 was worth 100 trillion Zimbabwean dollars but even this was not enough to ride a bus to work for a week. By 2008, inflation stood at 500 billion per cent and prices on basic goods were rising twice a day. Money was completely worthless and the local currency all but abandoned.
Citizens now have until September to exchange their remaining notes for American dollars. The bank has $20 million ready to use as pay-outs to people with Zimbabwean dollars.
The governor of the Reserve Bank of Zimbabwe, John Mangudya, told Bloomberg in a statement that the decommissioning of the currency has been "pending and long outstanding," explaining that Zimbabwe "cannot have two legal currency systems" so the change is being made to "safeguard the integrity of the multiple-currency system or dollarization in Zimbabwe."
More about Zimbabwe, Currency, Dollar, Inflation, Hyperinflation
 
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