Source: RBZ IMPORTS $15M WEEKLY – Sunday News May 7, 2017
Tinomuda Chakanyuka, Senior Reporter
THE Reserve Bank of Zimbabwe has increased its importation of cash from $10 million to $15 million per week in response to the acute cash shortages that have been experienced over the past weeks.
Cash shortages have worsened in recent weeks with some banks going for days without disbursing cash while some have also cut withdrawal limits to as low as $30 per day.
Withdrawal limits stipulated by the RBZ are $100 per day and $300 per week.
In an interview yesterday, RBZ governor Dr John Mangudya said the Central Bank was stepping up efforts to ensure the situation improves.
“We have stepped up the importation of cash to meet demand. We are now importing $15 million up from $10 million per week,” he said.
He said coupled with imports, US dollar deposits have improved in banks but financial institutions were quick to convert the money into their nostro deposits, creating pressure for local depositors.
“US dollar deposits have increased significantly by between 40 and 50 percent but banks are quick to turn them into nostro deposits,” he said.
Dr Mangudya said the cash shortages have been worsened by increased demand for cash as parents were now preparing for schools opening. Schools open on Tuesday for the second term of the year.
“The demand for cash this week was quite high on account of preparations for the opening of schools which coincided with month end pay days,” he said.
Dr Mangudya encouraged parents to pay school fees via electronic transfers.
“While we are encouraged by the improvement in the use of plastic money by the transacting public, we would like to encourage the public to continue to embrace plastic money and electronic payment systems. Those paying school fees are advised to pay school fees predominantly by transfers as opposed to cash,” he said.
According to the 2017 monetary policy statement Point of Sale transaction volumes surged 260 percent in 2016 after the country processed transactions worth $2,9 billion in 2016 up from $1,7 billion processed in 2015.
Dr Mangudya said bond notes and coins in circulation have reached $160 million of which $140 million was in notes and $20 million in coins.
The bond notes are backed by a $200 million African Import Export Bank.
Dr Mangudya has been on record stressing that the amount of bond notes in circulation will not exceed the $200 million.
Externalisation of cash has been pointed out as one of the factors leading to the country’s liquidity challenges. According to the RBZ an estimated $1,8 billion was externalised in 2015.
Over the past weeks cash problems have heightened resulting in long queues at banks.
The RBZ announced last month that it was also limiting cash back facility by retailers and wholesalers to $20 to curb hoarding of cash.
The RBZ has also announced last week that it was offering a five percent reward to whistleblowers reporting on individuals, traders and firms hoarding, selling or illicitly funneling cash out of the country.