Zimbabwe

Zimbabwe faces deep macroeconomic imbalances. After a period of relative macroeconomic stability when hyperinflation was broken in 2008 with the move to full dollarization, the fiscal situation has deteriorated sharply since 2015. Large fiscal deficits during 2016–18, financed by the issuance of quasi-currency instruments nominally at par to the U.S. dollar, built up pressure in the dollarized economy. The fragile equilibrium was maintained by exchange controls and other restrictions on access to foreign exchange (FX).