Hyperinflation in Zimbabwe

20th Century Timeline

21st 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.

5/2006Year-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.