Cash crisis continues

A PERMANENT solution to Zimbabwe's persistent cash crisis is far from over as clients jostle to withdraw their savings stuck in the banks.

Although government commentators had predicted a reduced demand for cash after the festive holiday, The Zimbabwean this week established that the cash crisis could persist until February.

Long queues were seen this week with some customers saying they had failed to withdraw money for three days.

“I have been coming here since Tuesday, today it’s a Thursday but I have not withdrawn a single dollar. I have three children who need school fees and money to buy uniforms. I do not know what to do. We also need money for food,” said Susan Makumbirofa from Glen View.

She said her husband could not stand in the bank queue as he works out of town.

Reserve Bank governor, Gideon Gono, in a public announcement on New Year’s Eve, said the central bank had pumped a total of Z$33 trillion into the banking sector to complement the $67 trillion which was already in circulation.

He promised the situation would improve at the start of the year, accusing what he termed big “money movers” and cash barons for the current crisis.

Gono also accused transport operators, wholesalers and bank employees for fuelling the crisis. Given the total amount in circulation of about $100 trillion, it needs only two million individual account holders to exhaust it at the maximum daily withdrawal of $50 million per person per day.

It is estimated that there are about 2,1 million personal account holders in the country, which will translate to about $47 million per account if the $100 trillion in circulation is shared equally.

This excludes corporate and other institutional cash requirements. Gono said there were 2,1 million active corporate and institutional accounts in Zimbabwe.

“There is need for higher denominations of $2 million and $5million because the real value of the recently injected notes is similar to the existing ones,” an economist with a commercial bank told The Zimbabwean.

The maximum daily withdrawal in Zimbabwe is enough to buy two chickens.

Cash-hungry Zimbabweans are asking why the country’s cash shortages was worsening they when the hurriedly deposited $200 000 notes that were previously rendered obsolete in “tactical demonitisation” by the central bank continued trading as legal tender.

Post published in: Economy

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