Economics
How a ‘Giant Ponzi Scheme’ Destroyed a Nation’s Economy
- Zimbabweans have had savings decimated twice in a decade
- Consumers facing chronic cash shortages, rampant inflation
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Almost two decades of profligate monetary policy has destroyed Zimbabwe’s economy and fueled rampant inflation, decimating the savings of its people twice.
Hyperinflation of as much as 500 billion percent in 2008 made savings worthless and led to the abolition of the local currency in favor of the dollar the following year. In 2016, former President Robert Mugabe’s cash-strapped government introduced securities known as bond notes that it insisted traded at par with the dollar. In 2018, it separated cash from electronic deposits in banks without reserves to back them, causing the black-market rate to plunge.