Government planning new currency

By Tererai Karimakwenda
30 October 2007

A severe shortage of bearers cheques has hit the country and the Reserve Bank of Zimbabwe (RBZ) is reported to be drafting plans to introduce a new currency. Bearers cheques are currently the only legal tender in Zimbabwe. Our Harare correspondent Simon Muchemwa spoke to sources within the RBZ who said the plan is to bring in the new notes once a substantial amount of the current bearers cheques have been removed from circulation. Muchemwa said this is an attempt by the RBZ to lower the exchange rate and to limit hoarding. The exchange rate for US$1 surpassed the Z$1million mark in mid October.

Muchemwa explained that for 2 weeks now account holders have been finding it difficult to withdraw their hard earned money at the banks because they run out of notes as early as 10:00 am. This has made planning very difficult for people whose salaries are deposited automatically. Long winding queues can now be seen at most banks, including Stanbic, Stanchart, Zimbank, Barclays and all building societies.

Zimbabweans joke that they are “queue people” a funny way of dealing with the daily grind of spending hours in a queue. But the bank queues are now as long as queues for basic commodities which continue to be very scarce and extremely expensive.

Economic experts have insisted that the introduction of a new currency will not solve anything unless there are wholesale changes in the general political and economic climate. Businesses are closing weekly and investors have looked away from Zimbabwe, due to disruptive government policies, corruption and mismanagement. Instead of permanent solutions, economy experts say the government keeps implementing stop-gap measures and leaping from one crisis to another.