The dollar is the currency of Zimbabwe. It is subdivided into 100 cents. It is normally abbreviated with the dollar sign $, or alternatively Z$ to distinguish it from other dollar-denominated currencies.

History
The first Zimbabwean dollar was introduced in 1980 and replaced the Rhodesian dollar at par. The present ISO 4217 code was ZWD. At the time of its introduction, the Zimbabwean dollar was still worth more than the U.S. dollar, with ZWD 0.68 = USD 1.00. However, the currency's value eroded rapidly over the years. On 26 July 2006, the parallel market value of the dollar fell to one million to the British pound [1].

Second dollar
Rampant inflation and the collapse of the economy have severely devalued the currency, with many organisations using the US dollar, the euro, the pound sterling, or the South African rand instead. Early in the 21st century, Zimbabwe started to experience hyperinflation. Inflation reached 624% in early 2004, then fell back to low triple digits before surging to 1,281.1% in December 2006 [8]. If policies do not change, the IMF has predicted an inflation rate of over 5,000% for the year 2007 [9] and 6,400% for 2008 [10].
The year 2007 has started badly as inflation reached another record high of 3714% (year-on-year) in April [11]. The monthly rate for April exceeded 100%, implying that inflation may soon exceed all forecasts, as 100% monthly inflation over sustained 12 months would produce annual inflation of over 400,000%. Mid year inflation has been breaching records as inflation for May was estimated at 4,530% (year-on-year) [12].
On 2007-06-21, the American ambassador to Zimbabwe, Christopher Dell, told the Guardian newspaper that inflation could reach 1.5 million per cent by the end of the year. The current unofficial inflation rate is above 11,000%, and the black-market exchange rate is Z$400,000 to the pound.

Inflation
On 16 February 2006, the governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono, announced that the government had printed ZWD 20.5 trillion in order to buy foreign currency to pay off IMF arrears[13]. In early May 2006, Zimbabwe's government announced that they would produce another 60 trillion Zimbabwean dollars [14]. The additional currency was required to finance the recent 300% salary increase for soldiers and policemen and 200% increase for other civil servants. The money was not budgeted for the current fiscal year, and the government did not say where it would come from. On May 29, Reserve Bank officials told IRIN that plans to print about Zim$60 trillion (about US$592.9 million at official rates) were briefly delayed after the government failed to secure foreign currency to buy ink and special paper for printing money.
In late August 2006, it was reported that about ten trillion old dollars (22% of the money supply) had not been exchanged for revalued dollars. These bearer cheques were demonetized.
On 27 June 2007, it was announced that central bank governor Gideon Gono had been ordered by President Robert Mugabe to print an additional $1 trillion to cater for civil servants' and soldiers' salaries that were hiked by 600% and 900% respectively.[15]
On 28 July 2007, it was reported that Mugabe has said that Zimbabwe will go on printing money if there isn't enough for underfunded municipal projects. [16]

Money supply
In 1980, coins were introduced in denominations of 1, 5, 10, 20 and 50 cents and 1 dollar. The 1 cent coin was struck in bronze, with the others struck in cupro-nickel. In 1989, bronze-plated steel replaced bronze. A 2 dollar coin was introduced in 1997. In 2001, nickel-plated steel replaced cupro-nickel in the 10, 20 and 50 cents and 1 dollar, and a bimetallic 5 dollar coin was introduced. These coins [17] remain legal tender but, due to their minuscule value, they only function as gambling tokens in Zimbabwean casinos.
Plans by the Reserve Bank of Zimbabwe, for new Z$5,000 and Z$10,000 coins were announced in June 2005 [18]. However, the coins never appeared.

Coins

Main article: Paper money of the Zimbabwean dollar Banknotes, traveller's cheques and bearer cheques
In 1980, the Reserve Bank of Zimbabwe introduced notes in denominations of 2, 5, 10 and 20 dollars. 50 dollar notes were introduced in 1994, followed by 100 dollars in 1995, 500 dollars in 2001 and 1000 dollars in 2003.
In 2003, with mounting inflation, the Reserve Bank started issuing travellers cheques in denominations of 1000, 5000, 10,000, 20,000, 50,000 and 100,000 dollars. These were superseded later the same year by bearer cheques, initially in denominations of 5,000, 10,000 and 20,000 dollars, with cheques for 50,000 and 100,000 dollars following in 2006.

First dollar
On 1 August 2006, the new currency was introduced, with bearer cheques in denominations of 1, 5, 10 and 50 cents, 1, 10, 20, 50, 100, 500, 1000, 10,000 and 100,000 dollars. There is also a 5 dollar denomination although the note does not appear on any of the Reserve Bank advertisements. Bearer cheques of 5,000 dollars (dated 01 February 2007) and 50,000 (dated 01 March 2007) were issued in March 2007. Bearer cheques of 200,000 (dated 01 August 2007) were issued in August 2007.

Second dollar
Banknotes are proposed in denominations of 1, 5, 10, 20, 100, 500 and 1000 dollars. The 1 dollar note has an image of the Victoria Falls and a buffalo, the 5 dollar the Kariba dam wall and an elephant, the 10 dollar agricultural activity and a grain silo, the 20 dollar portrait of a mine site and a mine with a jack hammer, 100 dollar the botanic gardens and the Great Zimbabwe conical tower, the 500 dollar a portrait of a dairy farm. There are no indications of what will be on the 1000 dollar note[19].

Exchange rate history

Paper money of the Zimbabwean dollar
Least valued currency unit
Economy of Zimbabwe