State-sanctioned ‘monopoly money’

A quick update on my post from a few days ago. How silly of me! There I was anticipating new notes and wondering whether the first one would be a Z$1 million banknote. Instead, with typical inefficiency, the government has extended the use of their temporary ‘bearer cheques’at the very last minute (the largest denomination being Z$20,000).

Here is a picture for those interested in seeing what our state-sanctioned ‘monopoly money’ looks like.

With shortages of fuel and anxious queueing for scarce basic commodities having now become a permanent facet of Zimbabwean life, citizens began 2006 in long, winding queues to return the artificial currency called bearer cheques to banks ahead of the expiry of their planned circulation deadline this week. The bearer cheques were put into circulation in 2003 as a stop-gap measure because the government had no foreign exchange to import the special paper required to print proper money. Since the Zimbabwean currency had become so worthless that the government itself complained that it needed to invest Z$2 000 to print a Z$500 note – the highest denomination note at the time – the bearer cheques had come in very handy. With denominations of up to 20 000, they made life a bit easier for Zimbabweans who needed to stuff an entire car boot with worthless notes to fill a tank of petrol. But the cheques had been meant to be only a temporary measure.

Now, three years later, the Robert Mugabe government has failed to introduce the promised new banknotes because it still lacks foreign currency to import the paper to print new money. This has forced it to extend this week’s deadline of the expiry of the circulation of the bearer cheques by another six months until June. But because the notice was poorly communicated to banks and delayed in getting published, tens of thousands of Zimbabweans besieged banks around the country to hand in the bearer cheques, afraid of losing out on this week’s expiry of their circulation. Eyewitnesses in Harare said some slept in bank queues in a bid to return the artificial currency. “I only knew of the extension of the deadline when I was already in the bank queue … I had been queueing for four hours when bank staff announced that the rush to return the bearer cheques was no longer necessary,” said Charles Muchagonei, an engineer.

Here are a few examples of how confused the government is with its own deadlines: note the issue and expiry dates (sample from notes in my wallet today).

Looks like I am definately going to have to go handbag shopping!

Technorati Tags: Zimbabwe, economy, bearer cheques, inflation, banknotes, currency, banking

This entry was posted by Just Business on Thursday, January 5th, 2006 at 7:21 pm. You can follow any comments on this entry through the RSS 2.0 feed. Both comments and pings are currently closed.