Hyper Inflation- Zimbabwe is suffering

Many people say, that, what you do not know, cannot hurt you. But, it may hurt other people, as has been proven by the present situation in Zimbabwe, due to the onset of hyper inflation since early 2004. Due to its status as a third world country, it is being ignored by the developed countries and is left to its own devices to fend itself from hyper inflation. Ignorance may be bliss, but it is unpardonable. Zimbabwe has been reeling under hyper inflation for the past 4 years and the imperialistic policies of Robert Mugabe have not helped its cause.

Hyper inflation essentially occurs when there is a massive amount of currency, but it is not met with a proportionate increase in the output of goods and services. That is, the supply of currency is not met with adequate demand. Robert Mugabe’s party men have been accused of printing large amounts of currency before the electoral polls in June, which were won by Mugabe in a controversial manner. A country may be said to be facing hyper inflation when the inflation is above 50% on a month-to-month basis or when the cumulative inflation over 3 years is 100% and above. At the time of hyper inflation, banks provide 24 hour loans, sometimes reverting to precious metals such as silver and gold, and even switching to alternate currencies. At these times, countries may even use a foreign currency for measuring its own currency, for eg, usage of the USD.

On the 16th of July, the official inflation rate was recorded at 2.2 million%. Zimbabwe released currency note’s of the denomination of 10 million, 50 million and even 100 million dollars. But this was not enough to quell the inflation rate, with unemployment rampant. The Zimbawe government went as far as to release a 100 billion dollar note to quell the inflation rate. Last month, they decided to lop of 10 zero’s from the currency , so that, with effect from 1st August, the erstwhile 10 billion ZWD would become equal to one dollar. But ,now, one dollar is equal to 1 trillion ZWD due to the rising inflation rate.

It will take a miracle for previously, one of the richest countries of Africa- Zimbabwe to save itself from internal collapse due to hyper inflation. Earlier this month, one of the ministers called for a 6 month freeze on price’s of commodities, but whether it will be implemented, and whether it will help is to be seen in the coming future.
For now, we should all hope for the best, that Zimbabwe is saved from this phenomenon of hyper inflation, as starvation is rampant throughout the country, and the already poor people are suffering even more.