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What should a nation do with a $10 billion note? If it’s Zimbabwe, knock off 10 zeros.
The revaluing of the African country’s hyper-inflated currency will turn 10 billion Zimbabwean dollars into one.
Gideon Gono, Zimbabwe’s Central Bank Governor, announced the devaluation on Wednesday - one week after a $100 billion bill was issued.
It’s a financial magic trick minus the applause.
With a 2.2 million percent inflation rate – the highest in the world – the country’s billion-dollar notes disrupted the country’s computer systems. It turns out, computers, ATMs, calculators and other electronic devices at Zimbabwe’s banks couldn’t handle transactions with the vast amount of zeros. The billion-dollar notes couldn’t even purchase a loaf of bread.
Zimbabwe’s economic turmoil began over a decade ago when white farmers – the force behind the country’s economy – supported opposition leader Morgan Tsvangirai’s Movement for Democratic Change Party. After a violent takeover of the land by current president, Richard Mugabe, farmlands were left in ruins, resulting in the loss of jobs and homes.
But Zimbabwe is just one of the many countries suffering from high inflation rates. With rising gas prices and the increasing cost of food, nations around the world are bearing an economic burden.
MainStreet gives you a worldwide look at some nations struggling with growing inflation rates.
Vietnam
High oil prices and food costs are taking its toll on weak economies, and no country is safe. Vietnam’s inflation rate of 27% hit a 17-year high in July. While food prices slightly decreased throughout June, gas prices saw a 30% spike, resulting in a 36% increase on domestic fuel gas prices which are state-controlled. Retail gas prices also rose 31%. Vietnamese drivers now shell out 19,000 dong or $4.35 per gallon.
Currency Converter: $1 US = 16, 734 Dong
