New bearer cheques push prices up

Described by economists as an attempt to apply
lipstick to a frog as well as an admission of defeat
to the inflation monster, Gono’s move to print bearer
cheques with values of Z$1 million, Z$5 million and
Z$10 million, is viewed as a move aimed at lessening
the cash crisis ahead of the elections in order to
reduce the degree of anger within the electorate over
the Zanu (PF) government.
However, by midday on Friday when the higher
denominations were reduced, a survey by The Zimbabwean
showed that most retail shops and supermarkets had
started adjusting prices upwards to match the higher
denominations. It was also established that foreign
currency trading rates rose immediately after the new
denominations had flooded the booming black market.
Independent economist, John Robertson described the
introduction of the new bearer cheques as “a sure form
of fuelling inflation and giving in to it”. He added
that what Gono had done was merely “accepting defeat
and use the same means he has been using to try and
solve this crisis despite the fact that they have been
failing all along.”
When The Zimbabwean visited a number of supermarkets
in Harare it emerged that were prices were being
adjusted. For example, a 2kg packet of rice was
costing Z$3, 5 million but was raised to Z$5 million
on Friday.
Commuter omnibuses also started increasing fares on
Friday with short distances going for up to Z$2
million whilst residents of Chitungwiza and Norton
were being asked to pay up to Z$4 million.
“This is a response to the introduction of the new
bearer cheques and the worker suffers the most. We
can’t tolerate this anymore,” Zimbabwe Congress of
Trade Unions secretary general Wellington Chibhebhe
said.
Before the introduction of the higher denominations,
the highest value bearer cheque was the Z$750 000,
introduced late last year by Gono, together with a
Z$500 000 and Z$250 000 note.