THE Reserve Bank of Zimbabwe (RBZ) imported $20 million ahead of the festive season to meet the increased demand for cash, the governor John Mangudya has said.
BY FIDELITY MHLANGA
Mangudya made the revelation as banks, especially in Harare, struggled to meet demand for cash resulting in long-winding queues at most banking halls.
Desperate depositors, who have struggled for most of this year to withdraw their money from banks owing to a liquidity crunch, said they needed the cash to travel to rural areas during the Christmas and New Year holidays.
A snap survey done by standardbusiness this week showed that many banks were battling to adjust to clients’ ballooned cash demands prompted by the festive season.
Mangudya said the central bank had done its best to tackle the cash shortages.
He said the long queues witnessed at most banks last week were due to an increased demand for cash.
“Indeed, the long queues are associated with the increased demand for cash needed for the festive season,” he told Standardbusiness in an interview on Thursday.
“The long queues also reflect the bunching of pay days before the Christmas holiday.
“We have increased cash imports to ameliorate the shortages of cash.
“The bank imported an additional amount of $20 million before the festive season.”
Mangudya said the RBZ expected new economic policies being pursued by President Emmerson Mnangagwa’s new administration to improve the liquidity situation.
“The economy is a game of faith and confidence,” he said.
“We, therefore, expect the current confidence building trajectory to result in the efficient circulation of money within the economy.”
As of last Thursday, Barclays Bank’s minimal withdrawal was pegged at $100, Steward Bank ($60), NMB ($80), CBZ ($40) and CABS ($30), mostly in US dollars.
However, depositors complained that the cash was not enough for their holiday needs.
“They are giving us $30 in the form of US dollars,” said a CABS client who only identified herself as Chido.
“It’s too little for me to travel to my rural area and come back, but there is nothing I can do, that’s what is there.”
Labour and Research Institute of Zimbabwe economist Prosper Chitambara said the cash shortages would not be solved overnight owing to lack of confidence in the struggling economy.
“The monetary authorities cannot deal with the huge demand of cash because the supply is still little,” he said.
“The supply is small due to a number of issues, chief among them the issue of confidence in the formal market.
“We were expecting confidence to improve due to a number of reforms that have been announced by government.
“But it seems the confidence will build once those reforms have been implemented or after elections next year.”
Veteran economist John Robertson said one of the ways the cash crisis could be addressed was the scrapping of the bond notes.
“Government must clear the bond notes and the entire US dollars will start to appear in the banking system,” he said.
“The bond notes are bad money and bad money drives away good money.”
Robertson said there was hope that in the next two months, more than $100 million externalised money will be wired back into the country, thereby improving the cash situation.