CASH shortages persist with some banks now putting a cap on withdrawals of as low as US$100 a day, instead of the US$1 000 limit set by the Reserve Bank of Zimbabwe (RBZ) a fortnight ago.
A survey by The Patriot this week showed that banks were offering an average daily withdrawal of between US$100 and US$300.
With payment of salaries for most workers and pensioners continuing, the banking public has been forced to spend long hours in queues, only to be given a fraction of their salary.
Early this month, the central bank announced the imminent introduction of bond notes as part of a raft of measures to promote exports and ease cash shortages.
RBZ Governor Dr John Mangudya a fortnight ago said the country was importing some US dollars to ease the cash shortages, assuring the long queues at banks would be a thing of the past.
But contrary to this assurance, the cash crisis is in fact worsening.
Speaking at a breakfast meeting organised by the Roman Catholic Church early this week in Harare, Barclays Zimbabwe managing director, George Guvamatanga proposed the central bank should introduce a maximum withdrawal limit of US$500 per week.
He said the country is depleting its nostro accounts as it continues to bring in money into the economy that is not being used for productive purposes.
“If we keep on using money in the nostro accounts that keeps on disappearing then we need a different mode,” said Guvamatanga.
“I propose the central bank introduce a maximum withdrawal limit of US$500.”
He backed the introduction of Bond notes, arguing the US dollar was being ‘abused’.
“Why should tomatoes that have been produced in Mutoko be paid for in foreign currency, why must workers be paid in foreign currency,” Guvamatanga questioned.
“We need a means of transacting that is not going to be abused.
“We cannot keep on bringing money into the economy that is disappearing.”
Addressing delegates at the same function, Dr Mangudya said when the country introduced the multi-currency system, it did not anticipate the rand or pula would weaken against the US dollar.
Zimbabwe, six years ago, adopted a basket of foreign currencies, among them the US dollar, South African rand, Botswana pula and British pound.
But the most used were the US dollar, the rand and the pula.
“There has been a shift from the multi-currency in 2009 to the US dollar in 2016,” Dr Mangudya said.
“We have put all our eggs in one basket now which is why the demand for the US dollar has increased.
“In the southern region, they used to use more of South African rand, but they are now using US dollars, so it means where we used to import US$20 million a month, we are now importing US$40 million because there has been a shift from the rand to the US dollar when the rand weakened.”
Mangudya blamed Zimbabwe’s ‘too open economy’ for promoting cash shortages and cash externalisation.
He said for the past six years Zimbabwe had a bank withdrawal limit of US$5 000, but in the US, the currency owner has a bank withdrawal limit of US$400.
“In the region, in South Africa it is R5 000, in Zambia it is 4 000 Kwacha, but in Zimbabwe still we are complaining of the US$1 000 limit,” he said.
“This is not sustainable hence the cash shortages.”
Dr Mangudya said the country had failed to manage its foreign currency as imports, which were almost at par with exports between 1990 and 2009, had to date doubled while exports trailed, leading to an average deficit of about US$2,5 billion annually.
Dr Mangudya said most Zimbabweans were unaware that exports, primarily tobacco and minerals such as gold, platinum, fero-chrome and diamonds were the major source of foreign currency circulating in the country.
“Some of you laugh at the farmers sleeping at the tobacco auction floors, but those are the people bringing in the foreign currency,” he said.
The RBZ, Dr Mangudya said, would begin paying exporters the five percent bonus in the form of Bond notes in October.
He said to encourage a saving culture, banks would incentivise depositors with a five percent interest if the account is in US dollars and 10 percent interest if the account is in rand for savings from six months and above.
Dr Mangudya urged the banking public to resort to plastic money as a way of reducing the demand for cash.
The RBZ governor said cash usage in the country accounted for 80 percent of transactions, while plastic money accounted for 20 percent.
He said the RBZ was targeting increasing the use of plastic money from 20 percent of transactions in the market to 80 percent in the next five years.
However, Guvamatanga appealed to bankers to slash charges to encourage the use of plastic money.