$100 now 1m in Zimbabwe as FX rate plunges to its lowest

The Zimbabwean dollar, on Tuesday, weakened to over 10,160 against the US dollar in the spot market. 

The depreciation is the first time since the currency was reintroduced in 2019.

According to a Bloomberg report, though being a millionaire would be great news for most people, in Zimbabwe it underpins the country’s economic woes.

The decline means that anyone in the country with $100 is now a millionaire in local currency terms.

The Zimbabwean dollar remained just below that level at 9,973, according to data posted on the country’s central bank’s website.

The local unit, according to the report, has lost almost 40 percent of its value against the dollar on the official market so far this year — making it the worst-performing currency in the world.

The parallel market rate also surpassed the milestone — trading at between Z$12,000 to Z$14,000 according to ZimPriceCheck.com, a website that monitors both official and parallel exchange rates in the country.

“The depreciation means that to buy a loaf of bread in the local currency, you need to count out 100 bills of the highest denomination,” the report reads.

“That’s invoking painful memories of the past in a country where more than a third of people live below the poverty line.

“In 2008, when hyperinflation prompted the central bank to issue a 100 trillion dollar note, pensions were wiped out overnight and many resorted to barter.” 

A year later, the local unit was dropped in favour of the dollar, and ten years later, it was reintroduced.

Since then, it has remained unstable despite measures made by the government to stabilise the currency, such as requiring corporations to pay all of their taxes in the local currency and hiking interest rates to the highest levels in the world, Bloomberg said.

Last year the greenback again surpassed the Zimbabwean dollar as the most-used currency in the southern African nation amid surging inflation.