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Death of Zimbabwean dollar: 175 quadrillion Zimbabwean dollars will be exchanged for $5

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zimbabwe-162465_640By NewGram Staff Writer: Reserve Bank of Zimbabwe Governor, John Mangudya announced that customers having Zimbabwean dollar accounts prior to March 2009 can approach the banks to convert their Zimbabwean dollar balance into dollars.

This statement came after President Robert Mugabe’s government discarded the virtually worthless national currency. Zimbabwe started using foreign currencies like the US dollar and South African rand after the Zimbabwean dollar was ruined by hyper-inflation in 2009.

As reported by media outlets bank accounts with balances of up to 175 quadrillion Zimbabwean dollars will be paid $5. The bank accounts with balances above 175 quadrillion dollars will be paid at an exchange rate of $1 to 35 quadrillion Zimbabwean dollars. Customers in possession of stashes of old Zimbabwean dollar notes can walk into any bank and get $1 for every 250 trillion they hold.

Reportedly the highest and last bank note to be printed by the RBZ in 2008 was 100 trillion Zimbabwean dollars. This process will legally end the local currency.

 

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Indian Rupee: One Of The Worst Performing Currencies

The rupee is still overvalued, according to the 36-country Real Effective Exchange Rate calculation after adjusting for inflation

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Indian Rupee: One Of The Worst Performing Currencies. flickr

The Indian rupee’s plunge to an all-time low of 69.09 against the US dollar, compared to the previous low of Rs 68.865 in November 2016 reflects the ill-effects of US President Donald Trump’s disastrous economic policies on the world at large. Indeed, American protectionism through higher import duties coupled with the consequences of renewed US sanctions against Iran is indeed playing havoc with economies across the world. That the rupee has fallen by more than eight per cent over the last one year is not good news for India, though, there is a silver lining in terms of the possibility of higher exports. The hard reality is that the rupee is one of the worst performing currencies in the world and the consequences of American policies could make things worse.

Not only have foreign institutional investors been pulling out funds from the Indian market, having withdrawn a whopping Rs 46,197 crore in three years, the spectre of higher crude prices due to the sanctions against Iran could disturb the applecart further considering that India depends heavily on crude imports to meet its oil needs. If there is any consolation at all for the rupee’s plunge, it is that most emerging market currencies are crashing.

currency
Indian currency notes. Pixabay

Also read: Crores of rupees being spent on defunct websites of Municipal Corporation of Delhi

The Reserve Bank’s prop by selling US$400 to 500 million in one-month futures contracts has saved the day for India. Almost an equal amount has been sold through Mint Street. Mercifully, a weak rupee need not be necessarily bad for the Indian economy. The rupee is still overvalued, according to the 36-country Real Effective Exchange Rate calculation after adjusting for inflation. As of May, the over-valuation was 14.67 per cent. This could give exports a boost which is a silver lining. There is also a Moody’s report which says that India is one of the five countries that are least vulnerable to currency pressures amid strengthening of the US dollar due to low dependence on external capital. But the downside is that as US interest rates go up, investors who borrowed at a cheaper rate would find returns from investing in India not worth the risk. On balance, major economic challenges lie ahead of India meeting with would be no mean task. (IANS)