Traveller's cheques may not ease cash crisis

The Reserve Bank of Zimbabwe on Friday launched local currency traveller's cheques in a bid to ease the cash shortage crisis affecting the country.

Zimbabwe has suffered a scarcity of hard currency for some time as the central bank has been unable to print enough bank notes.

The official Herald newspaper on Friday said the internal traveller's cheques, ranging from Zim $1,000 to Zim $100,000 denominations, would "go some way in alleviating the crisis ... traveller's cheques are safer and more convenient to use than the large amounts of cash that people have been moving around with".

However, others believe the move by the central bank may not help at all.

Dennis Nikisi, director of the Graduate School of Management at the University of Zimbabwe, told IRIN on Friday there was no guarantee that merchants would accept the traveller's cheques as payment.

"It's a question of attitude, are merchants going to accept these traveller's cheques, will they change them into liquid cash? People are still very, very doubtful whether it's going to be practical or not. People here are saying there's no value in anything other than actual cash. In my view it will be slow in taking off, the cash shortage will persist," he said.

Nikisi added that it would take "a month or two" to properly gauge the use and acceptance of the traveller's cheques.

It was important to note, also, that a large proportion of everyday commodities, ranging from fuel to bread, had to be purchased on the black market, he said.

"If you want fuel and you have to get it on the black market, is the person who is selling the fuel going to accept such a kind of currency? If the seller on the black market is not going to be able to immediately use the traveller's cheques for purchasing other items, and the requirement is that they have to bank them, then it's the same as using regular [personal] cheques - which they don't accept. You still require cash to buy any product on the black market," Nikisi explained.