Cash crisis set to worsen, MDC-T warns

Cash crisis set to worsen, MDC-T warns – NewZimbabwe 19/03/2016

THE country’s cash crisis is so severe some banks are no longer supplying US dollars and are only dispensing South African rand, the main Movement for Democratic Change opposition party has said.

Calling the crisis “debilitating”, the MDC said on Saturday that some banks had restricted cash withdrawals from ATMS and tellers.

“Clients attempting to secure cash for day to day needs are now confronted with reduced daily limits at ATM’s and tellers in Banks,” party spokesman Obert Gutu said in a statement.

“Some Banks are unable to supply US dollars in cash and instead offer cash Rand. When they do so clients must pay for the cost of exchanging Rand for USD balances and then when they attempt to use the Rand in local markets, they find that they are offered goods at a significant premium to the USD prices.”

Cash shortages, a feature of Zimbabwe’s 2008 economic and political crisis, resurfaced at the beginning of March.

Significant job losses in 2015 and a slowdown in industrial activity has meant fewer people are using banks in the southern African country.

The Morgan Tsvangirai-led MDC said illegal money changers had resurfaced on the streets, charging stiff premiums for anyone wanting to buy US dollars, the party charged.

“All of these developments point to an emerging cash crisis which is likely to become much worse in the next few weeks,” said Gutu.

“The implications are very serious – clients will be fearful that their banks may be on the edge of failure – even if, from a technical point of view, they are sound financially.

“The business community is discovering that they cannot pay their suppliers even if they have ample funds in the Banks.

“If this continues, shortages of goods will start appearing and queues might develop for fuel.”

Gutu blamed “a total absence of confidence” for the crisis, adding that “this can only be addressed by a change in government”.

“The beleaguered and faction-ridden Zanu PF regime simply has no solutions to the myriad problems that the country is currently facing.

“Only a legitimate and democratically elected government will be in a position to extricate millions of Zimbabweans from the life penury and deprivation that they are presently experiencing.

Zimbabwe abandoned its own currency in 2009 and now uses mainly the US dollar and the South African rand, although other currencies are also legal tender.