Commercial banks collected $30 million of new notes and
coins yesterday from the Reserve Bank of Zimbabwe and account holders should be
able to start accessing their $300 weekly cash withdrawal rations from most
banks starting today.
With the weekly cash withdrawal limit set at $300, at least
100 000 account holders should be able to withdraw cash this week, unless there
is another injection from the Reserve Bank of Zimbabwe.
As bank vans started congregating at the RBZ to collect the
new $2 and $5 notes and the new $2 bond coins, RBZ Governor Dr John Mangudya
said measures had been put in place to counter the channelling of cash from
banks to the black market and the locking up of the new cash into the informal
sector.
He did not go into detail, but the withdrawal limits, the
small change-denominations, monitoring to ensure businesses bank cash and
general checking are all likely to be part of that process.
Dr Mangudya said he expected all financial institutions to
start dispensing the new notes and coins today.
While withdrawal limits remain at a maximum of $300 a week,
the authorities intend to review them when the situation improves in line with
the thrust of restoring normalcy in the economy.
Banks are also expected to start feeding money into automated
teller machines (ATMs) soon.
Dr Mangudya said the RBZ will closely monitor the movement
of cash from banks to depositors to prevent the channelling of money to illegal
cash dealers.
These have been selling notes and coins to desperate people
at premiums of up to 50 percent.
Most of the premiums are paid by people needing kombi fares
as other purchases are normally only cheaper for cash if no premiums are paid.
“Money moves from formal to informal sector; it gets
trapped there,” said Dr Mangudya. “So, it means we need to make sure that the
economy is formalised. We need to improve production to grow the circle of the
formal sector. We need to address the structural challenges.”
On enforcement of legal instruments to preserve cash in the
formal system, Dr Mangudya said: “It’s a must; our teams will be on the ground
to ensure that compliance is done. We also need to ensure that shops that
receive cash bank it in line with the Bank Use Promotion Act. Big outlets will
be monitored.”
Dr Mangudya said reports that the RBZ had not released cash
to banks yesterday were incorrect.
“It’s not true that there is no money (released to the
market). The banks are collecting the money, so today (Monday) is the day for
collection of the money.
“Those ones that were able to be served in the morning
should be able to give their customers.”
His remarks followed long queues of seemingly frustrated
depositors at most banking halls.
The RBZ chief said the cash supply will keep improving in
the next few days as monetary authorities continue to drip-feed the market.
The introduction of new notes and coins is expected to
increase the amount of cash in circulation from about $855 million to almost
$1,9 billion.
Dr Mangudya has said the RBZ aims to increase the amount of
cash in circulation to 10 percent of total money supply, which is close to the
standard global thresholds.
Bankers Association of Zimbabwe (BAZ) vice president Mr
Ralph Watungwa confirmed that banks started receiving cash from the RBZ
yesterday.
“I can confirm that the new notes are being taken from the
central bank and normal processes for takeover of the notes are underway,” he
said.
“Some banks have already collected the notes while others
are still in the process. The public was expecting to hold the cash today, but
it’s a process. As BAZ we are confirming that the banks will start dispensing
the new notes tomorrow (today).”
A lot of arbitrage has been in progress for some months.
Yesterday, there was still around a 35 percent premium on
notes and coins sold for mobile money and foreign currency dealers were giving
a similar discount on US dollars bought for cash.
Prices of many goods at the tuckshops and street vendors
level are also around a third lower for cash.
Many informal traders then sell the cash they get as they
buy their goods in the formal sector for digital money. It is expected that as
more cash circulates, these arbitrage gaps will diminish.
Premiums for cash payouts should fall, the gap between the
cash and mobile money price of a US dollar banknote on the black market should
narrow and the prices charged by informal traders for cash should start
approaching the prices charged by formal traders regardless of the payment
system. Herald
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