Zimbabwe Currency Trouble

Zimbabwe Currency Trouble

The bond note, that is well worth one US dollar - the country's primary currency after 2009 - is actually increasing worries of a return to the ill fated neighborhood dollar. The move, initially announced in May, has fuelled several of the greatest protests of a decade against President Mugabe.

The federal government has given the bond note to deal with a worsening money shortage.

It hopes the cash substitute, that is legal tender of Zimbabwe but isn't legitimate outside the nation, is going to halt the flow of US dollars going overseas. At first, an amount worth $10m is actually being introduced into circulation in 2 as well as 5 dollar denominations.

Thus, it is a question of "when is actually a currency not really a currency?"

Withdraw from a bank now of Zimbabwe and you will be given with bond notes, that are officially interchangeable with the US dollar at a rate of one to one.

You are able to have the notes to the shops and swap them for goods. All perfectly and good, you would think.

In case the present experiment with bond notes actually is like taking a step backwards to the hyperinflation of 7 years back, not simply will the economy's very survival stay in jeopardy, so also will the government's.

Inflation rates reached 231,000,000 %. To match the climbing costs, a hundred trillion dollar note was issued - an adequate amounts for a weekly bus ticket - before the Zimbabwean dollar was scrapped in 2009

Full Article From BBC