What is the ZWD (Zimbabwe Dollar)
WD is the currency abbreviation for the Zimbabwe dollar, which was the official currency for the Republic of Zimbabwe from 1980 to 2009. The ZWD, or Zimbabwe dollar, is no longer minted or recognized as the official currency of Zimbabwe.
The Zimbabwe dollar was made up of 100 cents and was often presented with the symbol $, or sometimes Z$ to distinguish it from other currencies denominated in dollars.
BREAKING DOWN ZWD (Zimbabwe Dollar)
The turbulent history of the Zimbabwe dollar (ZWD) in many ways aligns with the ups and downs the country, and its people, have gone through in recent years. Once one of the agricultural centers of the region which produced large volumes of food for the surrounding areas, Zimbabwe, and its financial landscape have experienced some significant challenges which had severe effects on the country’s economy. For most of the past two decades, the people of Zimbabwe have endured widespread famine due to severe droughts. This weather challenge, in turn, led to poverty and food shortages in many parts of the nation.
First introduced in 1980, the Zimbabwe dollar replaced the Rhodesian dollar at par. This valuation made it worth more than the U.S. dollar, but that value quickly fell due to hyperinflation in the country. This out-of-control inflation drove the ZWD down, and at one point it was the least valuable currency in the world.
Redenominated of the Zimbabwe dollar happened in 2006, 2008, and again in August of 2009. Nicknamed "Operation Sunrise," the first ZWD revalued at 1000:1 to the second issue of the Zimbabwe dollar in 2006. The following year the Reserve Bank of Zimbabwe declared inflation illegal and banned the raising of prices. However, inflation still ran at 1000-percent.
The second revaluation began in 2008. The government started to allow some retailers to accept other foreign currencies as they printed banknotes with higher and higher values to keep up with inflation. Finally, in 2009, the government announced a third revaluation with 1,000,000,000,000 third dollars exchanging for 1 of the fourth issue dollars. Inflation continued to devastate the economy, and the Reserve Bank continued to print more banknotes.
Death of the Ailing Zimbabwe Dollar
After years of hyperinflation, the government of Zimbabwe announced the demonetization of the ZWD in 2009 which became final in 2015. Demonetization is the process of officially removing the legal status of a currency unit. Also in 2009, the government legalized the use of foreign currencies and abandoned the use of the ZWD in April.
The country would gradually transition from the ZWD to the use of multiple currency systems over the next few years including the Botswana Pula (BWP), Indian rupee (INR), euro (EUR), U.S. dollar (USD), and South African Rand (ZAR). At least nine different currencies acted as legal tender in the country. In 2015, the government announced that those who had bank accounts could exchange 35 quadrillion Zimbabwe dollars for 1 USD in those accounts.
Traders in Zimbabwe have their preferences as to which type of money to accept, but the U.S. dollar is the most widely accepted throughout the country. In late 2016, the government of Zimbabwe also introduced a batch of bond notes as a form of alternative currency, with a bond note having an exchange rate of 1:1 with the U.S. dollar.
During much of its existence, the most popular Zimbabwe dollar exchange in the international currency market was the ZWD/USD rate.
According to World Bank data, Zimbabwe has begun to get its problems with inflation under control. Currently, the country experiences a 3.8% annual inflation rate and has a gross domestic product (GDP) growth of a 3.4%, as of 2017, which is the most current year of available data.