ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It was redenominated three times (in 2006, 2008 and 2009), with denominations up to a $100 trillion banknote issued. The final redenomination produced the “fourth dollar” (ZWL), which was worth 1025 ZWD (first dollars). Use of the Zimbabwean dollar as an official currency was effectively abandoned on 12 April 2009.

Detailed explanation-2: -The Zimbabwean Reserve Bank printed different variants of the 100 Trillion note, each with the same Chiremba balancing rocks on the obverse. Rare, uncirculated variants of Zimbabwe banknotes still exist. One of these is the radar note whose serial numbers can be read either from the left or right side.

Detailed explanation-3: -In 2008, the inflation rate accelerated dramatically, from a rate in January of over 100, 000% to an estimated rate of over 1, 000, 000% by May, and nearly 250, 000, 000% in July. As predicted by the quantity theory of money, this hyperinflation was linked to the Reserve Bank of Zimbabwe increasing the money supply.

Detailed explanation-4: -This 100 trillion Zimbabwean dollar note was part of then RBZ governor Gideon Gono’s successive failed attempts at saving an economic meltdown, which was characterized by rapid hyperinflation coupled with a shortage of basic goods and services.

Detailed explanation-5: -Zimbabwe’s central bank allowed its citizens to exchange the country’s almost worthless currency for US dollars. Its 100-trillion-dollar note is worth just 40 U.S. cents.