Zimbabwe has started retiring its almost worthless local currency in favor of the US dollar Today [June 15, 2015], 35 quadrillion Zimbabwean dollars are equal to US$1, as a result of hyperinflation which hit the country in 2009.

The demonetization process of the Zimbabwe dollar started on Monday and will run till September 30, 2015.

People with accounts of up to 175 quadrillions (175,000,000,000,000,000) Zimbabwean dollars will be paid $5. Those who preserved bills at home will receive a rate of 250 trillion to $1 for their 2008-issued notes and 250 to $1 for their 2009-issued notes. Zimbabwe has been using the US dollar since 2009 when the use of the Zimbabwean dollar was abandoned. A multi-currency system has been in operation for the last six years, with the South African rand and US dollar in use since 2009 and the Chinese yuan, Australian dollar, Japanese yen and the Indian rupee joining the list of accepted currencies in 2014. Formally, the national currency was also in circulation although Zimbabwean dollars were marginally used, mostly as souvenirs for their gargantuan denominations. (Source: RT.com. (June 15, 2015). 'Zimbabwe has started retiring its almost worthless local currency in favour of the US dollar.')

Questions:

Demonstrate your own understanding of hyperinflation in Zimbabwe. (10) Has South Africa experienced hyperinflation? Explain. Comment on the recent inflation status of South Africa.