New bearer cheques spark confusion

HARARE - Zimbabwe has become the only country in the world that does not use real currency. Battling to keep pace with hyper-inflation, Zimbabwe's Reserve Bank governor has introduced a Z$100 million banknote disguised as a Z$100 000 bearer cheque, sparking confusion in the crisi

s-torn country.
The new note was introduced on Tuesday as part of sweeping currency reforms meant to reduce the public’s burden of carrying large sums of cash.
Reserve Bank governor Gideon Gono introduced a new family of bearer cheques after knocking off three zeros from the old money. The old bearer cheques will remain legal tender for only 21 days.
Bearer cheques are a type of paper money that was introduced three years ago when the country ran out of banknotes. The cheques, which are printed on plain paper with no security features, have now totally replaced the country’s rapidly devaluing bank notes.
The issuance of the new family of bearer cheques that are in series of 1 cent, 5 cents, 10cents, 50 cents, $1, $10, $20, $50, $100, $500, $1000, and $100 000 at a time when the old currency, comprising coins and notes up to $100 000, is also in circulation has sparked confusion.
In a snap survey in the capital, consumers said the “new money” markedly reduced the time spent in queues but many said they had problems coming to terms with new transaction values, which included cents that had long ceased to be instruments of trade. Supermarkets that had been struggling to handle vast stacks of cash for small purchases welcomed the new denominated money but said they were given little time to change the price tags. The price of consumer goods remained static, but was expected to rise faster again next week.
Gono said the currency reforms were implemented without much warning in order to “reign in on speculative tendencies.”
Business leaders said the change of currency would present problems for their accounting systems, and the currency rollover presented a software compliance nightmare for shops relying on electronic points of sale.
Gono announced the deployment of police officers and the infamous youth militia at all border posts to monitor import and export of currency.
“All those delinquent individuals and corporate citizens who have illegally externalized our currency will not be allowed to simply bring it back without being brought to book in accordance with laws of the land,” he said.
The central bank governor also announced a 60 percent devaluation of the country’s interbank exchange rate to 250 000 Zimbabwe dollars against 1 U.S. dollar – which now translates to 250 Zimdollars against the greenback after removing three zeros.
Economists said the devaluation would have little or no effect on Zimbabwe’s supersonic 1 184 percent inflation – the highest in the world – as commodities were being sold at black market rates, which were usually five times the official rate.

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