United States economist and currency expert Steve Hanke claims that Zimbabwe’s inflation rate has reached 290 per cent, making it the second highest in the world after Venezuela.
According to Hanke, the major driver of inflation in Zimbabwe is the acute shortage of foreign currency. This shortage has consequently resulted in the huge disparity between the bond note and the greenback.
Hanke considers the abolishing of the surrogate currency, the bond note, a necessity. He said of Friday:
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Zimbabwe’s annual inflation rate measured for today, using high-frequency data, is 290 per cent, a recent high.
… I have been predicting the abandonment of dollarisation has resulted in another inflation surge. If Zimbabwe fails to remove the bond notes from the system the economy will lapse within a year or less.
Hyperinflation is still fresh in the memory of the majority of Zimbabweans. As recent as 2008, the local currency plummeted in value, the inflation level reaching 89.7 sextillions per cent according to a report. The government had no alternative then but to abandon the local currency and adopt the current multi-currency regime.