Zimbabwe is desperately seeking a stable currency. He thought he had found it in April by launching ZiG, which means “Zimbabwe gold,” in reference to the gold that appeared majestically on the new banknotes. But this new attempt is about to fail. After a difficult launch (huge queues formed in front of banks due to a shortage of new denominations), residents relied on the old US dollar, the price of which continues to rise. The central bank was even forced to devalue the official price of the ZiG by 43% in September, while, in the unofficial market, the dollar rose from 13.56 ZiG in April to almost 28 today. Afraid of ending up with worthless bills, consumers rush to stores to exchange them for staples like sugar or flour.
However, inflation is taken very seriously in the country. Agents from the consumer protection commission tour the markets with their calculators to measure, week after week, the rise in the prices of basic foodstuffs such as oil and the exchange rate practiced. The country also has a Financial Intelligence Unit (FIU), responsible for tracking and sanctioning companies that refuse to pay in ZiG or do not follow the official exchange rate.
World record price increase
But inflation escapes government laws. In this case, Zimbabwe holds the world record for price increases, which peaked at 1,700% in February 2007, at a time when prices were doubling in twenty-four hours. The inhabitants have learned to live with grace. “mattress bench” (“the cushion bank”), a practice that consists of placing savings everywhere except in the bank, and in all currencies except that of your country.
Currency exchanges have limited effectiveness, judging by the five failures that have already occurred since 2009. The ZiG was introduced in April to replace the Zimbabwe dollar, which had lost 80% of its value since the beginning of the year. If the currency goes down it is because the inhabitants do not trust it, and even less so in the authorities. In fact, they too often resorted to printing money to pay their expenses, precipitating the devaluation of the local currency.
The government tried to stop the fall of the exchange rate by imposing a fixed rate and imprisoning exchange brokers who sold dollars on the street, without much success. Zimbabwe’s economy is practically isolated from the rest of the world. It no longer has access to private capital markets after defaulting on its debt in 2000. And multilateral institutions are reluctant to come to the aid of a repressive regime, led by Emmerson Mnangagwa, who came to power in a military coup. who overthrew Robert Mugabe. .
