Cash transactions rise 17pc 

Source: Cash transactions rise 17pc – DailyNews Live

Ndakaziva Majaka      11 April 2018

HARARE – Zimbabweans lived it up during the month of December last year in
spite of the country’s liquidity challenges, latest data from the Reserve
Bank of Zimbabwe indicates.

In its December 2017 monthly report, the central bank said the total value
of cash transactions was 17 percent higher at $245,92 million during the
month compared to $209,07 million in November 2017.

Traditionally know as a high-spending month, December 2017 was, however,
lacklustre compared to December 2016 spending which recorded $397,50
million in cash transactions reflecting a 38 percent decline is cash
transactions year-on-year.

“Mobile and Internet-based transactions also increased to $ 4,1 billion in
December 2017, from $3,36 billion in November 2017,” the apex bank said.

The 24 percent increase in mobile and Internet-based transactions
coincided with a 15,1 percent rise in card-based transactions.

“The total value of card-based transactions stood at $ 794,74 million
during the month under review, up from $690,13 million recorded in
November 2017,” said RBZ.

During the month of December 2017, the value of cheque transactions
however decreased to $3,6 million, from $4,88 million in November 2017.

This comes as formal retail businesses benefitted from increased use of
plastic money caused by a worsening cash crisis, which is slowly
undermining the informal sector, now the largest source of employment in
the country, according to analysts.

Most banks have stopped importing United States dollar notes due to the
fact that the largest component of money within the banking system is
unsupported by real currency through imports.

Zimbabwe adopted a multiple currency regime in 2009 to escape
hyperinflation, with use of the greenback dominating transactions.

But availability of US dollar notes started declining in 2016, with
critics blaming government for repaying local debts using electronic funds
transfers, in the process depleting the stock of foreign currency in the
banking system.

This led to a depletion of the stock of notes in the economy, which was
compounded by huge imports which also meant the export of currency from
the economy.

In response to the worsening cash crisis, government and the RBZ have
encouraged the use of plastic money, which resulted in the roll out of
more point of sale terminals in supermarkets, pharmacies and other retail
businesses and government departments.

In his Treasury bulletin recently, Finance minister, Patrick Chinamasa, is
on record saying the manufacturing sector experienced growth in 2017 due
to a number of government initiatives to improve the business environment
as well as the growing use of plastic money and e-transactions.

Plastic money, he said, was “easing the liquidity challenge for the
benefit of the industrial activities”.

– The Financial Gazette