Hyperinflation and dollarisation

Zimbabwe's inflation chart is dominated by hyperinflation in the late 2000s. After years of falling output and large deficits financed by money creation by the Reserve Bank of Zimbabwe, annual inflation reached the thousands of percent in 2007 and, by the later estimates of independent researchers, a monthly rate of billions of percent in November 2008, when official statistics effectively stopped. The Zimbabwe dollar lost all use as money, and in early 2009 the government allowed transactions in US dollars and South African rand, a de facto dollarisation that ended the price spiral almost immediately and allowed a rebound in output. The country later reintroduced local currency, including a new Zimbabwe dollar in 2019 and a gold-backed 'ZiG' in 2024, but inflation and exchange-rate instability returned, and the hyperinflation period explains why many Zimbabweans still prefer US dollar prices.