President Robert Mugabe’s government broke new economic ground on Wednesday by introducing a form of money that financial experts said had been hitherto unknown — the bearer cheque.
A spokesperson for the Reserve Bank of Zimbabwe was quoted in the daily Herald newspaper as saying that next week it would introduce ”bearer cheques” in an attempt to alleviate the desperate shortage of cash in the country.
The cheques were printed on banknote paper, looked like banknotes and were as ”good as cash”, the central bank said.
The cheques, which would be dispensed through automated teller machines, would come in denominations of Z$5 000, Z$10 000 and Z$20 000.
Banking executives said the only difference between a bearer cheque and a banknote was that the central bank would not call them banknotes, and that they expired on January 31 next year.
”This is being done for the convenience of the public while long-term measures are being put in place,” Information Minister Jonathan Moyo assured readers.
It was not explained why they were not called banknotes.
A senior Harare bank executive who asked not to be named said: ”It’s an invention … I have never heard of it before. For a central bank to issue something called a bearer cheque is probably unique.
”It can only be so they can tell Mugabe they haven’t had to issue a bigger banknote. He seems to need to reassuring that Zimbabwe is not really a banana republic. I can’t think of any other reason.”
The Reserve Bank warned since the beginning of the year that it was facing a shortage of cash and that the current highest banknote denomination of Z$500 was insufficient in the country’s current hyper-inflation environment.
However, it had refused to print higher value banknotes.
Thousands of Zimbabweans can be seen every weekday queuing at banks in the hope of drawing a small amount of cash, while cash itself has joined the long list of commodities available only on the illegal black market, attracting a premium of up to 50%.
Economists said the cause was the central bank’s failure to print enough money. They pointed out in a Third World society only a tiny minority of people have chequebooks and credit cards, and most people use cash.
”With inflation now at 427%, it means that five times as much cash is needed now than a year ago,” said the bank executive.
The government claimed the shortage was caused by ”hoarding” and last month published regulations that made it a crime to carry more than Z$5-million at a time.
Zimbabwe has been classified by the United Nations as having the fastest shrinking economy in the world — with gross domestic product forecast to tumble 12% this year. — Sapa