Zimbabwe bans foreign currency, reigniting fears of hyperinflation

In November 2008 Zimbabwe’s inflation rate hit 89.7 sextillion percent (897 000 000 000 000 000 000 000%).

The Government there printed Zim dollars (aka “quantitative easing”) until they were worth nothing.

In 2009, Zimbabwe pulled the Zim dollar, thereby ending hyperinflation.

Last month the Zimbabwean government introduced the RTGS dollar, still known as the “Zimbabwe dollar”.

The Money Show’s Bruce Whitfield interviewed Lee Kasumba, Host at Africa State of Mind.

Kasumba discussed the banning of foreign currency in Zimbabwe to stop the illegal money trade the government blames for rising inflation.

Until it introduces a new, permanent currency, the RTGS dollar remains the only legal tender.

Some manufacturers struggled using multiple foreign currencies, which were in extremely short supply.

Workers started demanding payment in hard currency as landlords and retailers were accepting only US dollars.

Zimbabweans can possess foreign currency, but they may not use it.

When considering other similar examples around the world; it takes on average 30 years after de-dollarisation for trust in local currency to return.

An argument for currency sovereignty is that a reserve bank can’t control forex (e.g. it can’t print foreign currency or set its interest rates).

Union leaders have threatened the government with mass action if they don’t reverse the ban and start paying workers in US dollars.

For more detail, listen to the interview in the audio below.

Enjoy The Money Show, but miss it sometimes?

Get the best bits emailed to you daily, right after it ends:

Subscribe to our Business Wrap Newsletter


This article first appeared on 702 : Zimbabwe bans foreign currency, reigniting fears of hyperinflation


Recommended

by NEWSROOM AI
Read More
Sexy Socks says Woolworths copied. But do they look the same? You be the judge

Sexy Socks says Woolworths copied. But do they look the same? You be the judge

Bruce Whitfield interviews Sexy Socks founder Dave Hutchison and Andrew Papadopoulos, a trademark attorney at KISCH IP.

South Africa among 10 most heavily taxed countries in the world - IMF

South Africa among 10 most heavily taxed countries in the world - IMF

Are you getting your money’s worth? Bruce Whitfield interviews Wayne Duvenage of the Organisation Undoing Tax Abuse (Outa).

Tax season – it’s here!

Tax season – it’s here!

The Money Show’s Bruce Whitfield interviews Edward Kieswetter, Commissioner at the South African Revenue Service (Sars).

Investec gives staff unlimited leave days and freedom to wear what they want

Investec gives staff unlimited leave days and freedom to wear what they want

The bank rewards innovation with substantial bonuses and pays according to output not hours at work, says Lesley-Anne Gatter.

10 unexpected things that most truly rich people have in common

10 unexpected things that most truly rich people have in common

Personal finance expert Warren Ingram on the money values that those "worth" R40 million or more almost invariably have in common.

'Most South Africans will complain about South Africa when they are elsewhere'

'Most South Africans will complain about South Africa when they are elsewhere'

Ray White interviews Sylvester Chauke, the founder of DNA Brand Architects.

Popular articles
Want to get rich? Got R100? You don’t need millions to start

Want to get rich? Got R100? You don’t need millions to start

Bruce Whitfield interviews Anthea Gardner, author of "Make Your Money Work for You: Think Big, Start Small".

SA’s richest woman opens up about being a refugee and becoming a billionaire

SA’s richest woman opens up about being a refugee and becoming a billionaire

Magda Wierzycka – Sygnia’s renegade CEO – on her attitude toward money (hopes and fears, successes and failures, etc.).

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

The reason for the leakage has been revealed, explains Table Mountain Aerial Cableway MD Wahida Parker.

The SA ballet star defying race and gender stereotypes

The SA ballet star defying race and gender stereotypes

Andile Ndlovu is a dancer with the Washington Ballet but is currently back in South Africa in Sleeping Beauty at the Artscape.

W Cape traffic chief: Stay close to other motorists on N2 to stay safe

W Cape traffic chief: Stay close to other motorists on N2 to stay safe

W Cape Traffic Chief Kenny Africa says private security working with the department is helping curb the stonings on the highway.

Were missing SA men victims of Vietnamese organ harvesting syndicate?

Were missing SA men victims of Vietnamese organ harvesting syndicate?

Gift of the Givers fears two South African men who went missing in Vietnam may have fallen prey to an organ harvesting syndicate.

'Not impossible' wife killer Rob Packham would reoffend if released - prosecutor

'Not impossible' wife killer Rob Packham would reoffend if released - prosecutor

Susan Galloway talks to Melanie Rice about the extensive public interest in the Packham and the Van Breda murder trials.

[LISTEN] Ndlozi: Mazzotti donated R200 000 to EFF registration in 2014 election

[LISTEN] Ndlozi: Mazzotti donated R200 000 to EFF registration in 2014 election

EFF's Mbuyiseni Ndlozi says the party was not aware of Mazzotti's alleged links to the underworld when it accepted party funding.