No end seems in sight to the cash crisis in Zimbabwe as several banks have now resorted to giving depositors coins because notes have disappeared from the banking system.
BY TATIRA ZWINOIRA
The cash parallel market is thriving and money changers are awash with the elusive notes, raising questions about their source.
A survey by The Standard last week showed that depositors were now being given mostly coins in denominations of $1, 50c, 25c, 20c and even 5c coins.
The survey also showed that withdrawal limits at a number of banks have gone down to a maximum of $50 a day.
At a ZB branch in the central business district, The Standard was told by one of the customer service agents that they were giving out withdrawals in 10 cent bond coins.
“Today, we were giving out bond coins, 10 and 25 cent coins. The maximum you can get is $50 in bond. The Reserve Bank of Zimbabwe (RBZ) has been giving us only bond coins for the past two days,” the agent said.
The revelation from the agent suggested that even the central bank was now failing to adequately supply cash to the banking sector.
Depositors said the banks were running out of cash at a very fast rate and that unless people came early, they would not be able to get any cash.
An FBC depositor told The Standard he got 50c bond coins.
The situation was the same at CABS where depositors were told there was no money.
At CBZ, The Standard saw depositors getting money in 10, 25, 50 cent and $1 coins.
Considered one of the more stable banks in the country, Stanbic had also joined the bond coins craze.
A depositor said the bank used to give out United States dollars and the South African rand but this was getting rare.
The country’s oldest bank, Standard Chartered was one of the few institutions that were last week giving out cash in United States dollars, according to a guard at one of the branches.
The maximum withdrawal limit still remains an average of $100 per week, as it was in a few months ago.
Experts say this new trend of bond coin withdrawals from banks was an attempt by the banking sector to hold on to notes as much as they could.
RBZ governor John Mangudya blamed the shortage of notes on market indiscipline.
According to the RBZ, the cash shortages are caused mainly by money changers, cross border traders and small scale gold producers who were allegedly taking the mineral out of the country.
There have been calls for the adoption of the South African rand as the transactional currency.
Mangudya, however, told a parliamentary portfolio committee on Finance and Economic Development that the adoption of the rand would not help as long as market indiscipline remained.
“We need to use plastic money so that we preserve what is in the nostro accounts so that it can be used for fuel and more critical imports. Our measures are looking at both demand and supply,” he said.
Economist Persistence Gwanyanya said the other reason for the prevailing cash shortages was that banks were keeping the cash to finance their nostro accounts.
“So it is now an issue of choice whether to give money to the depositing public locally or to reserve that money for foreign payments,” he said.
“If you deposit United States dollars with a bank they would prefer to have that money set aside for foreign payments.”
He said one needed to look at two dimensions: the shortage of cash in the local economy and the shortage of cash to make foreign payments.