Q:

What are the causes of inflation in Zimbabwe?

A:

Quick Answer

The hyperinflation in Zimbabwe was caused by a combination of poor economic policies, corruption and the unrestricted printing of money in an attempt to support the economy. President Mugabe's land redistribution scheme began the inflationary spiral, triggering collapses in the agricultural, banking and manufacturing sectors. As unemployment rose, the government began printing more money to increase military and government salaries. This destroyed all faith in the currency, triggering hyperinflation.

Continue Reading
What are the causes of inflation in Zimbabwe?
Credit: JEKESAI NJIKIZANA AFP Getty Images

Full Answer

In 1990, the inflation rate in Zimbabwe was 17 percent. The following year it jumped to 48 percent, and then continued to climb over the next 17 years. The government tried a number of different methods to control inflation, such as instituting price caps, outlawing the use of foreign currency, and printing new denominations. By the mid-2000s, inflation had increased to a rate so high that banknotes of Z$100,000,000 and higher were required for simple daily transactions. The government also attempted to print bills to pay off international debts, such as the $21 trillion bill they attempted to give the International Monetary Fund.

Zimbabwe devalued its currency three times in an attempt to control inflation. In 2006, it divided denominations by 1,000, striking three zeros from the currency. In 2008, it removed 10 zeros, and in 2009, it struck another 12 zeros from printed denominations. These three acts had the collective effect of making one new Zimbabwe dollar worth 10 trillion trillion old Zimbabwe dollars. Finally, the government gave up and stopped printing money altogether, allowing the economy to use a pastiche of foreign currencies.

Learn more about Immigration

Related Questions

  • Q:

    What is immigration amnesty?

    A:

    Immigration amnesty policies pardon illegal aliens for violating immigration laws, according to Legal Information Institute. Under these laws, the U.S. government officially excuses actions normally viewed as grounds for legal prosecution or deportation, such as falsifying identification documents to secure employment. Amnesty also allows immigrants to obtain legal US residency.

    Full Answer >
    Filed Under:
  • Q:

    Will immigration reform pass?

    A:

    As of November 2014, according to National Public Radio, President Obama plans to use executive action to reform immigration policies. This eliminates the need for Congress to pass immigration reform, although President Obama maintains that he prefers for Congress pass a more extensive bill independently.

    Full Answer >
    Filed Under:
  • Q:

    What is a sanctuary city policy?

    A:

    Sanctuary city policies are items of legislation that designate a city or region as a place where laws against illegal immigration are not enforced, according to the Center for Immigration Studies. This designation can also occur unofficially by a city, county or state not enforcing existing immigration laws.

    Full Answer >
    Filed Under:
  • Q:

    What is the Basic Travel Allowance (BTA)?

    A:

    According to the Embassy of the United States in London, a Basic Travel Allowance refers to a scam under which foreign nationals request money from U.S. citizens for travel to the United States, claiming that a BTA is required under U.S. law. The embassy warns citizens against the scam.

    Full Answer >
    Filed Under:

Explore