What Do You Do With A Defunct Zimdollar?

August 17th, 2009 by alyx · 3 Comments · loller dollar

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When your rate of inflation is exponential and your currency has been deprecated (and depreciated) so that even your country’s own post office demands payment for stamps in USD, what do you do with the leftover bills? Above, a sign recommends not using them for toilet paper, though I really do hope to hear Jay-Z or somebody rap about wiping with a one-hundred-trillion-dollar note one of these days, because that just sounds gangster. One guy – a Zimbabwean exile in the UK – has started advertising his newspaper on it, which is fittingly morbid if you are in the print-is-dead camp, but most people, when faced with a pile of Zimdollars, will probably start thinking about kindling.

Despite the efforts of Zimbabwe’s finance minister, however, the Zimdollar refuses to go away as currency. At least in rural areas, Gono and Mugabe still represent:

A woman pays her bus fare with 3 trillion in old Zimbabwe dollars — the equivalent of 50 U.S. cents. The collector accepts the brick of neatly folded bundles of a trillion each without bothering to count the notes.

“No one seems to worry, and it works,” said the woman, Lucy Denya, a Harare secretary who says she’s seen police officers using old notes to board buses.

President Robert Mugabe has called for the return of the Zimdollar as legal tender, complaining that most Zimbabweans lack the hard currency needed to buy basic goods. The central bank under governor Gideon Gono, a Mugabe loyalist, has acknowledged printing extra local money to fund government spending that fueled inflation.

But Finance Minister Tendai Biti, who joined the government as part of a power-sharing agreement between his Movement for Democratic Change and Mugabe’s ZANU-PF party, has declared the local dollar indefinitely obsolete. He has threatened to quit if a return to the local currency is forced upon him.

Granted, paying in dollars over there is still a little weird. This article says a shop will sometimes give you candy or an IOU in lieu of change, and there is one case of a guy threatening to bust a cap in a conductor who tried to change his American fiver in Zimdollars. But hey, nobody ever expected a transition from your own fiat money to somebody else’s fiat money to go smoothly.

More on this topic (What's this?)
Best Investments During Inflation
“THE WORST BIT IS YET TO COME”
Marc Faber: Massive Inflation and then War
Read more on Currency, Inflation, Investing in Zimbabwe at Wikinvest

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