In 2009 Zimbabwe accepted 9 currencies to do transactions such as the Australian Dollar, British Pounds, Botswana Pula, Chinese Yuan, Euro, Indian Rupee, Japanese Yen, US Dollar and South Africa Rand. These currencies are being used to solve the hyper inflation of more than 5000%. The Zimbabwe Bank Governor John Mangudya on an interview with CNN said “We changed the to a multiple currency system to stabilise, and inflation went down to 0% and it was magic”
Before the introduction of foreign currencies, Zimbabwe use to have hyper inflated dominations such as Z$100,000,000,000,000 (One Hundred Trillion Dollars); Z$10,000,000,000,000 ( Ten Trillion Dollars); Z$1,000,000,000,000 (One Trillion Dollars) which could be exchanged in for US Dollars until April 2016, when its value was about $0.40. These hyper inflated notes are not being purchased on line as souvenirs. Zimbabwe went from hyper inflation to deflation of -2.3%.The Country did not have the tools to fight the economic situation at that point in time which lead to keep printing money. This lead to prices changing by the minute causing stress revolving around fluctuation.
In 2009 inflation went up to 230,000,000%, due to the Zimbabwean Reserve Bank inability to contain hyper inflation , the Central Bank has stopped to print its own currency and the US Dollar is now its official currency. There were rumours that Zimbabwe will switch its currency to the Chinese Yuan but the Reserve Bank Governor set the record straight saying ” We are saying that since you can import / export from South Africa you can use the Rand, If you want to import from China you can use the Yuan. The US Dollar is our reserve currency”.
There is a demand and liquidity crunch in Zimbabwe and no local currency means no monetary policy rules why the Central Bank is heavily reliant on foreign inflows. As the government tries to spur growth, street traders are turning into currency traders hoping to capitalise on the multi-currency system. It will take a while before Zimbabwe will reintroduce its own currency but for now it has its own coins called bonds. For every coin in circulation there is an equivalent U.S Dollar coin held in reserve. There are over $13 million worth of these coins in the country.