New bank notes trigger massive price increases

The introduction of higher denomination bank notes by the Reserve Bank this week has triggered massive price increases, amid reports the new Z$100 million weekly cash withdrawal limit can only buy one kilogram of beef.

An irate MDC MP for Glen View, Paul Madzore, said new measures being
implemented by central bank chief Gideon Gono are just making things
worse instead of halting the cash crisis.

Gono earlier this week introduced Z$10 million, $50 million and $100
million banknotes. But retailers responded to the introduction of the
new notes by increasing prices of basic goods and commodities, which
shot up by an average 500 percent.

But all economists will tell you that just printing money does nothing
except increase inflation. ‘Its now become a game where each time the
central bank introduces new notes, almost all retailers take advantage
of the situation to exploit consumers through relentless price
increases. This is a fight Gono has clearly lost,’ Madzore said.

The legislator was speaking to us outside a bank where he had been
queuing since morning. He said the money that people can withdraw on a
single day is not even enough to buy a 10kg bag of maize meal.

‘Look, this problem can only be solved by Robert Mugabe stepping down.
There is no other magic formula that they can use now to remedy the

This situation is now irreversible it needs a political solution to stop the rot,’ Madzore said.

The central bank had originally announced that withdrawal limits for
individuals would be increased to Z$100 million per week, while
companies can withdraw Z$50 million. Previously individuals were
allowed to withdraw Z$500 000 daily and companies Z$1 million.

But after a meeting between Gono and leaders of the Zimbabwe Congress
of Trade Unions, it was agreed the new withdrawal limit will go up to
$500 million for individuals on December 12. There was no relief for
companies though who remain limited to Z$50 Million.

But Madzore doubted that the personal withdrawal increases would change
anything.  He said with the economy in free fall and inflation at
dizzying levels, the cash withdrawal limits will still spark price

Announcing the bank changes Gono has said that a week after the 12th
December, workers could withdraw up to $10 billion per month against
presentation of a pay-slip. But this pay slip had to be endorsed at the
bank to prevent abuse of the facility through repeated withdrawals. It
was not clear what he meant by this.

He also said that early next year, all workers would be able to fully
encash their salaries, without any limit, upon presentation of a
bona-fide verifiable pay-slip, which would be checked and stamped at
the bank.

Many observers feel that Gono’s statements were merely to placate the
ZCTU and stop further protests, but that nothing will actually change
in the future.

Zimbabwe has to be the only country in the world where people are
starving to death, with their money locked up in a bank and not
available to them.

SWRadio Africa

Post published in: News

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