Zimbabwe money: history, description, rate and interesting facts

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Zimbabwe's money has a special history, because until recently the national currency was used here, but because of the phenomenally high depreciation, it had to be abandoned. Today, the US dollar is the official currency in the country.

A Brief History

The emergence of the national currency in the country is associated with its independence from the UK. It happened in 1980, it became one of the last countries in Africa to gain sovereignty.

It was then that the history of the national money of Zimbabwe began. Initially, the first coins were minted, issued back in 1980. Then, the following year, the first banknotes appeared.

However, the Zimbabwean dollar did not last long. Already in 2009, the state had to abandon the use of national money. The government abandoned them in favor of the US dollar.

Description

Zimbabwe's money had an international designation consisting of the letter code ZWL. The currency symbol was a sign identical to the US dollar, but the letter Z (Z$) was added before it.

One Zimbabwe dollar was made up of 100 cents. The history of this currency is quite interesting becauseis unprecedented. By the time it was withdrawn from circulation, it was the cheapest monetary unit in the world.

Denominations

It is worth noting that during the existence of this currency there were several versions of the dollar of this country.

The "First Dollar" (ZWD) lasted the longest: from the country's liberation until 2006, when it was replaced by the "Second Dollar" (ZWN). The second option did not exist for long and already in 2008 was replaced by the "third" (ZWR) at the rate of 1 to 10,000,000,000.

The "third" option was used even less. Already in February 2009 in Zimbabwe, money at the rate of 1 to a trillion was re-denominated. However, regular denominations did not save the situation, and in April 2009 a ban was issued on the use of national money as a means of payment.

From that moment, the US dollar, the British pound and the currencies of neighboring states began to be used in the country. Subsequently, the US dollar took the lead and continues to be used in the country as the main currency.

Coins

Initially, metal coins were in circulation in denominations of one, five, ten, twenty and fifty cents, as well as one dollar each. In the early 2000s, $2 and $5 coins were added.

During the period of the second denomination, coins were in circulation in denominations of 10 and 25 dollars. The plans of the state included the introduction of coins worth 5 and 10 thousand dollars, but they were never minted.

Banknotes

Since the country's liberation, Zimbabwe's paper money has been issued. Initially, denominations of one, five and ten dollars were put into circulation. After 2 years, another twenty-dollar bill was added to them.

In the nineties, 50 and 100 dollars were also issued. In 2001, a 500 dollar note was introduced, and in 2003, a 1000 Z$ note.

Due to the incredibly high inflation rate in the country, there was a shortage of money supply, so the issuance of emergency checks began. Their face value was from 5 to 100 thousand Zimbabwe dollars. However, these and other measures aimed at saving the national currency did not have the desired effect, so in the end the currency ceased to exist.

Crisis in Zimbabwe

Such an unprecedentedly high inflation (hyperinflation) of money in Zimbabwe is primarily due to economic problems in the country. Despite the fact that South Africa is considered to be the more economically developed region of this continent, Zimbabwe lags far behind its territorial neighbors.

The country has few natural resources, no access to the sea. In addition, the country gained independence late. The inept management of the state by the leadership also played not in her favor. Together, all these factors led to the fact that the country began a long and rather severe economic crisis, which continues to this day.

Although there have been some positive developments in recent years, the impact of the Zimbabwean economic crisis on the currency and its value has beenvery large.

Currency rate

The Central Bank of Russia, even during the period of use in the South African country ZWL, did not set the official exchange rate of the ruble against this currency. There was simply no need for this, since the Russian Federation and Zimbabwe practically do not interact with each other. Trade and economic ties are poorly developed, and tourists from Russia rarely visit this state. In general, Russians know little about Zimbabwe. The money, exchange rate and history of the currency of this state are of little interest to our fellow citizens. Unfortunately, it is.

Different financial institutions set their own rate of Zimbabwe's money against the ruble, but depending on the company, it could change significantly. Often several times a day.

As for the modern currency of this country, its exchange rate is not difficult to determine, since the American dollar is now used there. Therefore, Zimbabwe's money at the exchange rate against the ruble corresponds to the US dollar. According to 2017 data, for one USD you can get approximately 58-60 rubles.

If we compare the modern money of Zimbabwe at the rate of the US dollar, it will be identical. Because it is the same currency no matter where it is used. In addition, the American dollar is now used as the official currency not only in the United States and Zimbabwe, but also in some other countries of the world, for example, in Ecuador.

Exchange transactions

Today you can come to the country without worrying about how to exchange money for local ones, because you can just take US dollars with you. Besides, inIn the cities of Zimbabwe, you can easily exchange the currencies of neighboring countries, for example, the South African rand, as well as the pound sterling and the euro.

You can change money at the airport and major financial institutions. But it will be much easier to do it in Russia, since the commission will not be as high.

Before, when Zimbabwe's national money was used in the country, the situation with currency exchange was much worse. Especially when the situation with the depreciation of money worsened. The exchange rate could change several times a day.

In such a situation, not every financial institution was ready to work with currency exchange.

Cashless payment

The country is quite far behind in development from the advanced countries of the West, so the situation with cashless payments in Zimbabwe is far from the best. You can pay for a purchase or service using a bank plastic card only in large stores, hotels and restaurants.

Even in large cities, cashless payment terminals are not everywhere, and in rural areas it is practically impossible to pay by bank transfer anywhere.

Using foreign bank credit cards will be even more difficult, since they are almost not accepted anywhere. Therefore, going to this country, it is better to get enough cash in advance. There are not many bank branches in Zimbabwe where you can cash out your funds, and there are even fewer ATMs.

It is good that the US dollar is now used in the state. This greatly reduced the financial difficulties faced byforeigners coming to this country.

In recent years, there have been some positive trends in this matter. More and more banks and ATMs, as well as exchange offices appear in the capital city of Harare. The authorities of the country and big business are now focused on the development of the tourism sector, where you can earn pretty good money.

Interesting facts

The depreciation of money in Zimbabwe was so rapid that literally within one day the exchange rate could change several times. Prices for goods and services also rose several times a day. For example, in 2008, a can of beer was charged 100 billion Zimbabwean dollars, and after just one hour it could cost 150 billion.

It is also interesting that Gideon Gono, who then served as director of the country's Reserve Bank, received the Ig Nobel Prize (the opposite of the Nobel Prize), which is given for the most stupid, unnecessary and strange discoveries and achievements. It was awarded to him for teaching mathematics to the entire population of the country by means of rapid hyperinflation, forcing them to learn how to count in the range from one to 100 trillion.

The situation today

Now it is difficult to understand what kind of money is in Zimbabwe, since several currencies are payment in the country at the same time. In 2016, the Reserve Bank restricted the ability to withdraw cash in dollars, euros and South African rand, which are actively used in the country as a means of payment.

The export of these currencies outside the country is also limited. Bankseeks to expand the use of currencies other than the US dollar. The authorities have obliged the population to hand over part of the proceeds not only in dollars, but also in euros and rands.

Also, the owners of trade organizations were obliged to indicate the cost of goods not only in dollars, but also in South African rands. Probably, the government of the country is striving to carry out financial reform. Perhaps the state will be adopted as the official currency of South Africa, which is already used in almost all South African states.

This would be the most optimal solution for Zimbabwe, since the most important trade and economic partner for this country is South Africa, not the United States. Accordingly, the use of the currency of this country is more profitable and convenient than the American one.

It is not yet known how the country's authorities will act in the near future to solve existing problems, but they will definitely not remain inactive, since this is fraught not only with a severe crisis, but with a real collapse of the country's economy. In no case should this be allowed, so we urgently need to look for a way out of this situation.

Conclusion

Zimbabwe is a country quite interesting in cultural, historical and natural terms, but too remote. Therefore, Russians rarely visit it. In addition, the lack of the sea and high service for recreation does not attract people.

Today there is no growing interest in the development of the tourism industry in the country, so significant financial injections are directed here. Who knows maybesoon this country will become one of the most attractive for tourism in the South African region. The country has the necessary resources for this. It is great for eco- and ethno-tourism, here you can spend a safari on the African savanna no worse than in Kenya or Tanzania.

Be that as it may, now the country is in a transitional period, when changes are taking place and will take place in almost all spheres of the economy and life. The financial sector is one of the most problematic and important, so changes will be made in this area more than once.