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Fake money hits Harare
ZimOnline
August 17, 2006

http://www.zimonline.co.za/headdetail.asp?ID=12686

HARARE - Counterfeit money has come into circulation in Zimbabwe's capital Harare, less than a week before the complete change-over to a new currency introduced by central bank governor Gideon Gono last week.

In sweeping currency reforms that also included a 60 percent devaluation of the local dollar, the Reserve Bank of Zimbabwe (RBZ) slashed three zeroes from every banknote and said it would introduce a new "family of bearer cheques" with less zeroes by August 21.

Bearer cheques are promissory notes first introduced by the RBZ three years ago at the height of cash shortages in Zimbabwe. They are not official legal tender but are used in the same way as money.

The RBZ says anyone still holding onto old bearer cheques after the change-over deadline would have to turn the cheques into "garden manure" and fraudsters have jumped in to make a quick buck as people rush to exchange old currency for the new one.

The counterfeiters appear to be targeting street vendors and other unsuspecting traders on Zimbabwe's bustling informal market to off load fake new bearer cheque notes especially in late night transactions.

For example, a mobile phone airtime vendor, Tapiwa Chitemerere, who was given a new Z$10 000 ($10 million in old money) bearer cheque last Tuesday night, said he did not suspect anything when a customer tendered the note.

"I gave him change and only realised the currency was fake when I tried to buy bread and milk at a supermarket the next morning," he told ZimOnline.

It was not possible to immediately establish from the RBZ how much counterfeit money could have been pumped onto the market or what measures the central bank was taking to curb the problem of fake bearer cheques.

But banks have raised an alert on the presence of fake currency. For example, the forensic services manager at Stanbic Bank Zimbabwe, one of the biggest commercial banks in the country, warned staff in a memo to be "on the lookout for fake bearer cheque notes of the new currency that are already in circulation …. we urge you to scrutinise the bearer cheques that you are handling with a view to putting a stop to this counterfeit note fraud."

But villagers in remoter parts of the country where new notes are still to be distributed could lose millions of dollars to counterfeiters, taking advantage of widespread ignorance about the new money among people in such parts of the country.

The RBZ currency reforms are meant to bring stability to the near-worthless dollar and to lessen the burden for Zimbabweans who were experiencing enormous inconvenience because of bearer cheques with too many zeroes.

Analysts and business leaders said the currency changes would in the interim help curb money supply growth but said far more drastic and broader reforms were needed if the central bank was to sustain its latest attempts to shore up the dollar. - ZimOnline

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