Wednesday, 19 November 2008

Zimbabwe's inflation rate - update

According to Steve H. Hanke's new Hyperinflation Index (HHIZ) at the Cato Institute, Zimbabwe's annual inflation is 89.7 sextillion percent!

The index was set at 1.00 on the 5th of January 2007. As at the 14th of November 2008 the index is at 853,000,000,000,000,000,000,000 which gives an annual inflation rate of 89,700,000,000,000,000,000,000%.

Here is an article, Zimbabwe hyperinflation 'will set world record within six weeks', from the Telegraph in the UK on the hyperinflation in Zimbabwe and what it means:
There comes a point, though, where the inflation rate makes little practical difference.

"The economy just stops functioning or slows down very much," said Prof Hanke. "A lot of barter takes place. Money is not used as much or if it is, it's all foreign exchange." Supermarkets in Harare are accepting only US dollars and South African rands, leaving those Zimbabweans without access to foreign currency in dire straits.
Reverse Gresham's Law: Good money drives out bad.

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