Zimbabwean dollar
The Zimbabwean dollar (currency code ZWD) is the currency of Zimbabwe since 1980. It is normally abbreviated with the dollar sign $, or alternatively Z$ to distinguish it from other dollar-denominated currencies. It is divided into 100 cents.
The Zimbabwean dollar replaced the Rhodesian dollar at par, which in turn had been adopted in 1970 as a decimalisation replacement of the Rhodesian pound at a rate of 2 Rhodesian dollars to 1 Rhodesian pound (R$ 0.71 = US$ 1.00). At the time of independence in 1980, one Zimbabwean dollar was still worth more than the US dollar (ZWD 0.68 = USD 1.00).
Inflation
| Zimbabwean inflation rates since Independence | |||||||||||
| Date | Rate | Date | Rate | Date | Rate | Date | Rate | Date | Rate | Date | Rate |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1980 | 7% | 1981 | 14% | 1982 | 15% | 1983 | 19% | 1984 | 10% | 1985 | 10% |
| 1986 | 15% | 1987 | 10% | 1988 | 8% | 1989 | 14% | 1990 | 17% | 1991 | 48% |
| 1992 | 40% | 1993 | 20% | 1994 | 25% | 1995 | 28% | 1996 | 16% | 1997 | 20% |
| 1998 | 48% | 1999 | 58% | 2000 | 56% | 2001 | 132% | 2002 | 139% | 2003 | 385% |
| 2004 | 624% | 2005 | 586% | 2006 | 914% | ||||||
Rampant inflation and the collapse of the economy have severely devalued the currency, with many organisations using the US dollar instead.
Early in the 21st century Zimbabwe started to experience hyperinflation. Inflation reached 624% in early 2004, then fell back to low triple digits before surging to a new high of 913.6% in March 2006. [1]
According to the Guinness Book of Records, Zimbabwe has currently the highest annual inflation rate in the world:[2]. Zimbabwe's annual rate of inflation is widely expected to reach four digits in 2006.
On 16 February 2006, the governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono, announced that the government had printed ZWD 21 trillion in order to buy foreign currency to pay off IMF arrears.[3]
Exchange rate history
This table shows a condensed history of the foreign exchange rate:
| Year | - | 1983 | 1997 | 2000 | 2002 (Jun) | 2005 (Mar) | 2006 (Jan) |
|---|---|---|---|---|---|---|---|
| ZWD per 1 USD | - | 1 | 10 | 100 | 1,000 | 10,000 | 100,000 |
This table shows in more detail the historical value of one U.S. dollar in Zimbabwean dollars:
| Date | Official Rate | Free / Parallel Rate |
|---|---|---|
| 1978 | R$0.6788 (Apr) | n/a |
| 1978 (Apr) | Note 1 | R$ pegged to US$ |
| 1980 | R$0.68 (Mar) | n/a |
| 1980 (Mar) | Note 2 | R$ tied to basket of FFR, DEM, ZAR, CHF, GBP, USD |
| 1980 (Apr) | Note 3 | Independence (1 Z$ = 1 R$) |
| 1982 | 0.8925 to 0.9140 (Dec) | - |
| 1982 | Note 4 | ZWD devalued by 16.5% |
| 1983 | 0.96135 (Jan) | up to 3.18 (July) |
| 1983 (Jan) to 1983 (Jun) | Note 5 | ZWD devalued by 5% |
| 1983 (July) | Note 6 | Parallel rate highly variable - premium up to 231% |
| 1983 (Aug) to 1993 (Dec) | Note 7 | Flexible basket; dual rates; 20% tax on outgoing payments |
| 1994 | 6.82 (Jan) | 8.36 (Oct) |
| 1994 | Note 8 | Floating official rate (July 1) ; dual rates; ZWD devalued by 17% |
| 1994 (July 2) to 1999 (Mar 30) | Note 9 | floating official rate; dual rates; rates unified 1998 (Dec) |
| 1995 | 8.26 (Jan) | 8.85 (Oct) |
| 1996 | 9.13 (Jan) | 10.52 (Oct) |
| 1997 | 10.50 (Jan) | 12.00 (Jan); 25.00 (Nov) |
| 1998 | 18.00 (Jan) | 16.65 (Jun); 19.00 (Jul); 23.50; rates unified 1998 (Dec) |
| 1999 | 36.23 (Jan) | 38.30 (Sep) |
| 1999 | Note 10 | On 1999 March 31, the Official Exchange Rate was pegged at ZWD 38 per USD; By 1999 (Dec) the parallel market had re-emerged. |
| 2000 | 38 (Jan) | 56 to 62 (Jul); 65 to 70 (Aug.) |
| 2000 | Note 11 | In Aug 2000, the Official Exchange Rate was pegged at ZWD 50 , then ZWD 51 and finally at ZWD 55 per USD; Parallel black market rates were at a large premium; In Nov. foreign exchange bureaux were closed. |
| 2001 | 55 | 70 (Jan); 80 (Feb); 100 (Mar); 120 (Apr); 140 (May); 160 (Jun);
250 (Jul); 300 (Aug); 400 (Sep); 300 (Oct); 320 (Nov); 340 (Dec) |
| 2001 | Note 12 | In June, the official rate became a crawling peg rate. |
| 2002 | Note 13 | In 2002 the parallel black market for foreign exchange mushroomed. |
| 2002 | 55 | 380 (Jan) to 710 (Jun), 1400 (Jul) to 1740 (Oct) to 1400 (Dec) |
| 2003 | Note 14 | In February 2003, the Official Exchange Rate was re-pegged at ZWD 824 per US $ |
| 2003 | 55 (Jan); 824 (Feb) | 1400 (Jan); 1450 (Feb); 2300 (May); 3000 (Jul); 6000 (Aug); 6400 (Oct); 6000 (Nov) |
| 2004 | Note 15 | In January 2004, semi-weekly (RBZ-controlled) currency auctions were set up to determine the official rate. |
| 2004 | 824 (Jan 1); 4196 (Jan 12) to 5730 (Dec) | 5500 (Jan 1) to 6000 (Dec) |
| 2005 | 5,730 (January); 6,200 (March); 9,000 (May); 10,800 (July 18); 17,600 (July 25); 24,500 (August 25); 26,003 (September); 26,003 (October) | 6,400 (January); 14,000 (March); 20,000 (May); 25,000 (July 18); 45,000 (July 25); 45,000 (August 25); 75,000 (September); 80,000 to 100,000 (October) |
| 2005 | Note 16 | In November 2005, the regular currency auctions were discontinued and the RBZ announced that "market factors" would control the exchange rate. |
| 2005 | 60,000 (Nov); 84,588 (Dec 30) | 90,000 (Nov); 96,000 (Dec 30) |
| 2006 | 85,158 (Jan 3); 99,202 (Jan 24) | 100,000 (Jan 6); 106,050 (Jan 19); 115,000 (Jan 20) |
| 2006 (Jan) | Note 17 | Economists predict an unofficial rate of nearly ZWD 250,000 to the US dollar by mid-2006. |
| 2006 (01.25) | Note 18 | RBZ caps daily varience of official exchange rate based on volume traded. The ZWD is able to fluctuate (from its average rate) in a daily band of: 0 % (under USD 5 million); 1 % (USD 5 to 10 million); 1.5 % (USD 10 to 15 million); or 2 % (exceeds USD 15 million). This effectively froze the official exchange rate. |
| 2006 | 99,202 (Jan 25) (click for details) | 125,000 to 150,000 (Jan 25); 165,000 (Jan 31); 175,000 to 190,000 (Feb 24); 220,000 (Feb 28); 205,000 (Mar 3); 230,000 (Apr 13) |
Coins, banknotes, bearer cheques and traveler's cheques
Coins
Coins have been issued since 1980 in denominations of 1, 5, 10, 20, and 50 cents as well as ZWD 1, 2, and 5. (click for image)
These coins remain legal tender. However, due to their minuscule value, they function as gambling tokens in Zimbabwean casinos.
Banknotes
Zimbabwe Banknotes have been issued in denominations of:
| Denomination | Years Issued | Design 1 | Design 2 |
|---|---|---|---|
| ZWD 2 | 1980 to 1994 | click for image | - |
| ZWD 5 | 1980 to 1997 | click for image | click for image |
| ZWD 10 | 1980 to 1997 | click for image | click for image |
| ZWD 20 | 1980 to 1997 | click for image | click for image |
| ZWD 50 | 1991 | - | click for image |
| ZWD 100 | 1992 | - | click for image |
| ZWD 500 | 2001 | - | click for image |
| ZWD 1,000 | 2003 | - | click for image |
The largest denomination, standard-issue banknote in circulation is currently the ZWD 1,000. The government, however, has issued bearer cheques in larger denominations to offset the money shortage.
Bearer cheques and traveler's cheques
Cargill Cotton bearer cheques 2003
In May 2003, a private company, the Cargill Cotton Group, issued bearer cheques for ZWD 5,000 and ZWD 10,000. These were valid for a period of six months. By the end of 2003, 85% of them had been redeemed. (These are regarded as authorised issues by the RBZ.)
| Type | Inscribed | ZWD 5,000 cheques - date issued | ZWD 10,000 cheques - date issued |
|---|---|---|---|
| 1 | Pay to order of Bearer | - | 01/05/03 (May 1, 2003) |
| 2 | Pay to Bearer | 01/06/03 (June 1, 2003) | 01/05/03 (May 1, 2003) |
| 3 | Pay to Bearer | 01/09/03 (Sept 1, 2003) | 01/09/03 (Sept 1, 2003) |
RBZ traveller's cheques
Zimbabwe's central bank, the Reserve Bank of Zimbabwe (RBZ), followed a few months later with a series of traveler's cheques in the following denominations: ZWD 1,000; ZWD 5,000; ZWD 10,000; ZWD 20,000; ZWD 50,000 and ZWD 100,000. These proved unpopular with the general public due to the need to produce ID both during issue and encashment of these, and also because of the obvious limited usage, since they can only be used once by the bearer.
Example of RBZ Traveller's Cheque Design:
| Denomination | Obverse Design | Reverse Design |
|---|---|---|
| ZWD 20,000 | click for image | click for image |
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RBZ bearer cheques
Beginning in September 2003, the RBZ issued bearer cheques in the values of ZWD 5,000; ZWD 10,000 and ZWD 20,000 on old ZWD 50 banknote stock. These bearer cheques were supposed to have a limited period of validity and have an expiry date. This rule is not applied, however, and all bearer cheques remain valid. (Note: On 3 January 2006 the expiry date of all RBZ Bearer Cheques was once again extended. New expiry date is 30 June 2006.) On 1 February 2006 a ZWD 50,000 RBZ bearer cheque was issued.
| Type | Issue Date | Expiry Date | Signed By | Watermark | Denominations |
|---|---|---|---|---|---|
| 1 | 15 Sep 2003 | 31 January 2004 | Acting Governor | No RBZ wmk | ZWD 5,000, 10,000 and 20,000 |
| 2 | 15 Sep 2003 | 30 June 2004 | Acting Governor | No RBZ wmk | ZWD 5,000, 10,000 and 20,000 |
| 3 | 1 Dec 2003 | 31 Dec 2004 | Governor | No RBZ wmk | only ZWD 20,000 seen |
| 4 | 1 Dec 2003 | 31 Dec 2004 | Governor | RBZ wmk | ZWD 5,000, 10,000 and 20,000 |
| 5 | 1 Dec 2003 | 31 Dec 2004 | Dr. G. Gono, Governor | RBZ wmk | ZWD 5,000, 10,000 and 20,000 |
| 6 | 1 Dec 2003 | 31 Dec 2005 | Dr. G. Gono, Governor | RBZ wmk | ZWD 5,000, 10,000 and 20,000 |
| 7 | 1 Feb 2006 | 31 Dec 2006 | Dr. G. Gono, Governor | RBZ wmk | ZWD 50,000 |
Examples of RBZ bearer cheque designs:
| Denomination | Bearer Cheque Design |
|---|---|
| ZWD 5,000 | click for image |
| ZWD 10,000 | click for image |
| ZWD 20,000 | click for image |
| ZWD 50,000 | click for image |
Cargill Cotton bearer cheques 2004
In April 2004, the Cargill Cotton Group issued bearer cheques again. These were denominated ZWD 10,000, ZWD 20,000, ZWD 50,000 and ZWD 100,000.
Other bearer cheques
Other companies issued bearer cheques in rural districts of Zimbabwe. (These are not regarded as authorised issues by the RBZ.)
New currency in 2006
In late October 2005, the head of the Reserve Bank of Zimbabwe, Dr. Gideon Gono, announced that "Zimbabwe will have a new currency next year." New banknotes and coins will replace the current Zimbabwean dollar, but Dr. Gono did not give a name for this new currency. Many international observers believe the goal of a new currency was merely a campaign strategy, and will be impossible to implement due to large scale shortages of ink and paper in the country.
from the Mail + Guardian Online - 2006 February 26
No new notes for Zimbabwe
So it looks like the brand new $50,000 notes will be in use for a bit longer. The current "parallel-market" exchange rate is now around $150,000 Zimbabwean to $1 US.
Government will almost certainly not introduce a new currency this year as promised by the Reserve Bank to replace the battered local dollar because of economic and financial constraints, it has been learnt.
Sources said government does not have the resources - money, facilities and logistics - to introduce a new currency in the middle of an economic meltdown. The budget for the project in local and foreign currency terms is simply beyond the state's resource capabilities, they said.
See also
External links
- Reserve Bank of Zimbabwe
- Tables of Modern Monetary History: Africa
- Global Financial Data currency histories table
| Preceded by: Rhodesian dollar Reason: independence recognized Ratio: at par |
Currency of Zimbabwe 1980 – |
Succeeded by: Current |