GOVERNMENT is understood to have abandoned traveller’s cheques in preference for the now popular bearer’s cheques which are much cheaper to print than cash.
The businessdigest is reliably informed that government has since instructed Fidelity Printers and Refiners (Pvt) Ltd to cease printing the cheques as they have been rendered useless with the inception of the bearer’s cheques.
Fidelity is a subsidiary of the Reserve Bank of Zimbabwe.
Sources in the RBZ said the directive to stop printing the traveller’s cheques was made immediately after the new bearer’s cheques were issued and seemed to solve the cash fiasco.
“The government in conjunction with the central bank has advised Fidelity Printers not to print more traveller’s cheques,” an RBZ source said. “That decision was communicated to the management of the official government printers a day after the introduction of the bearer’s cheques.”
Government, reeling under pressure from the public to provide cash hurriedly introduced TCs which, however, were met with mixed reaction by the market.
The cheques became problematic due to identification and account number requirement complications.
Traveller’s cheques were unpopular with individuals and business refusing to accept them as legal tender.
Bankers confirmed that they were no longer receiving TCs from the central bank.
A production manager at Fidelity Printers refused to comment. “We are not allowed to divulge any information to the public,” said the manager.
The central bank also could not confirm the move.
“Those are security issues which should not be made public. Therefore we can neither confirm nor deny,” said an RBZ official in the financial markets division.
Analysts say the move is a sign of policy confusion on government’s part.
Economic commentator John Robertson said government was only abandoning a solution that was not so popular in the first place. “The traveller’s cheques were never popular from the start,” Robertson said.
“Banks are no longer selling the TCs which effectively means that they have gone back to their original use, that is for travellers.”
Meanwhile, there is concern that the new bearer’s cheques are susceptible to counterfeits.