Zimbabwe Hyperinflation: The 100 Trillion Dollar Note and Bus Fare

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At the peak of Zimbabwe's hyperinflation, a banknote printed with a one and 14 zeros could not cover a one-way bus fare. This episode takes the crisis apart piece by piece, starting from a surprising place: after independence in 1980, Zimbabwe was the breadbasket of its region, and its dollar was officially valued above the U.S. dollar. The damage came later. Land reform dissolved the property titles that farmers used as collateral, food production fell 45 percent between 1999 and 2009, bank credit dried up, and unemployment reached an estimated 80 percent.

With no tax base, sanctions limiting credit, and a costly war in the Congo, the government printed money. By mid-November 2008, monthly inflation hit an estimated 79.6 billion percent. The episode shows how ordinary people and financial professionals improvised around a currency in freefall, how the U.S. dollar finally ended the spiral, and why the government keeps trying to bring a local currency back.

• The Reserve Bank paid a Munich printing firm more than 500,000 euros a week to produce banknotes, the equivalent of 170 trillion Zimbabwe dollars entering the economy weekly.
• A 2007 price freeze and arrests of executives who raised prices emptied supermarket shelves and pushed daily commerce into the black market.
• Minibus drivers raised fares through the day and stopped up to three times a shift to swap takings for U.S. dollars or South African rand.
• Analysts compared Old Mutual's share price in London and Harare to derive the Old Mutual Implied Rate, a real exchange rate the central bank no longer published.
• Redenominations in 2006, 2008, and 2009 erased 25 zeros without fixing anything. Foreign currency was legalized in January 2009, and a new currency called the ZiG launched in April 2024.