Old Coins See New Life in Inflation-Stricken Zimbabwe

Zimbabwe unveiled a new monetary policy this week in an attempt to combat severe hyperinflation — out of control price increases as currency loses its value. While Americans may be feeling the pinch of an inflation adjusted dollar buying less, it's short change compared to the Zimbabwe 2,200,000% biting inflation rate.

Coins have long been worthless in a country that has printed new, larger denominated banknotes on an almost monthly basis. It was only last week when Zimbabwe's central bank introduced a 100 billion-dollar note that was already too small to purchase a single loaf of bread.

The latest strategy announced by central bank governor Gideon Gono is to slash 10 zeros from currency — 10,000,000,000 dollars will become just one.

"The Zimbabwe dollar will be redenominated by a factor of one to 10, which means we are removing 10 zeros from our monetary value. Ten billion dollars today will be reduced to one dollar with effective from August 1," said Gono.

And with that, old coins once again become useful for daily transactions.

The policy change and revalued money brings back into circulation old $5, $2, $1, 50 cent, 20 cent and 10 cent coins. Yesterday, the pocket change was important only to collectors. Today, the old coins can buy groceries.

Economists question the viability of the new policy, and for good reason. Zimbabwe cut three zeros from currency in 2006, but prices actually increased shortly after.

Without overhauls to the core reasons for Zimbabwean inflation, the coins may soon be valuable — once again — only to collectors who appreciate their history and eye appeal.

Learn more about inflation or get the latest coin news for collectors.