Hyperinflation in Zimbabwe

20 th Century Timeline

21 st Century Timeline 100-billion-dollar banknote is introduced in response to official year-on-year inflation rate of 2 million per cent. Warnings of power cuts for up to 20 hours a day while electricity is diverted towards agriculture. 9/2006 Riot police disrupt a planned demonstration against the government's handling of the economic crisis. Union leaders are taken into custody and later hospitalized, allegedly after being tortured. 5/2006 Year-on-year inflation exceeds 1,000%. New banknotes, with three [zeros] deleted from their values, are introduced in August. 45-day countdown for white farmers to leave their land begins, under terms of a land-acquisition law passed in May State of disaster declared as worsening food shortages threaten famine. Government blames drought, the UN's World Food Programme says disruption to agriculture is a contributing factor. Finance Minister Simba Makoni publicly acknowledges economic crisis, saying foreign reserves have run out and warning of serious food shortages Squatters seize hundreds of white-owned farms in an ongoing and violent campaign to reclaim what they say was stolen by settlers

Interest Rates Interest rates reached 160%, and the government refused to devalue the Zimbabwean dollar. Instead the government artificially pegged the exchange rate at the level that the market could not justify.

What’s Next Since Zimbabwe can not afford to buy the paper to print its currency, a severe cash shortage occurred. Mugabe’s opposition brokered a power- sharing deal this summer.

Recommendations -Stop printing money entirely. -Freeze government spending. -Lift all price controls.