Zimbabwe currently does not have a national currency.
Zimbabwe currently does not have a national currency!
Zimbabwe uses a range of other nations’ currencies as legal tender, such as the US dollar, the Swiss franc, and the South African Rand. Government salaries are paid in foreign currency. The country hopes to use a regional South African currency by 2012, if the currency is created by then.
During a recent conference in Dailan, China, a bustling Chinese metropolis, the Zimbabwe Vice President suggested using the Chinese Yuan as the reserve currency, since Chinese companies buy most of the Zimbabwe”s exports.
How does this affect dollar and euro holders? If less people use dollars and euros, then demand for these currencies will go down, and when the demand for something goes down, the value of that item goes down. If you hold dollars or euros or gold or silver, monitor demand for these products, since lower demand, means lower value, and you may want to sell products with steep value declines. How do you sell the dollar or euro? Exchange them for another type of money.
Watching the value of your money is similar to watching the value of your investments. If you bought shares in XYZ company, you would occasionally check the news to see if the company continues to produce innovative products well-received by customers. If sales decline, you might sell the stock. Same goes for the items you use as money, if demand declines, use another money.
As for Zimbabwe, the local government shouldn’t adopt any one currency. It should switch to using real products as money, or if that idea is unrealistic, they should monitor the currencies available, and only use ones retaining their value. If the monopoly banks (aka central banks) of other countries know they are being watched, then they might create less of their currencies to preserve the value of their currencies.
Read related article about Zimbabwe’s currency plans.
Does anyone know which currencies are used by the government to pay employees?