THE Bankers’ Association of Zimbabwe (BAZ) says demand for
cash remains higher than supply as many clients do not deposit their funds back
into the system despite continued withdrawals.
Long winding queues persist in banking halls across the
country despite injection of more cash into the system by the Reserve bank of
Zimbabwe. Just last week Treasury revealed that the monetary authority injected
additional $20 million of bank notes into circulation, which was expected to
ease the cash crisis.
BAZ president, Mr Webster Rusere, told Business Chronicle
that while the cash drip-feed process was progressing well, improvement was
imminent over time. He admitted bank queues persist and that these could not
disappear overnight as the cash injections coincided with payments of salaries
that have a high demand for cash.
“The demand for cash far exceeds the supply. Banks have had
to rely on allocations from Reserve Bank of Zimbabwe only as customers are not
depositing cash back into the banking system,” he said.
“Banks have to ensure clients are given an equal
opportunity to access the available cash. We are not seeing much in the way of
deposits and denominations of less than 50 cents are finding little acceptance
and apparently the market is rejecting these.
“While some deposits were received by banks, given the high
demand and the fact that very little if any cash is being deposited into banks
this situation can only improve as confidence and greater acceptance of
electronic transfers by all players of the market is witnessed.”
Mr Rusere explained that as each bank receives a cash
allocation from the Reserve Bank of Zimbabwe, it then allocates to branches and
ultimately to customers.
“The withdrawal limits are subject to guidelines from the
Reserve Bank of Zimbabwe and currently withdrawal limits are set at ZWL300 per
week per customer,” he said.
The BAZ leader commended the country for quickly embracing
digital banking platforms such as mobile money, point of sale, internet banking
and RTGS transfers. He encouraged
clients to use these channels rather than relying on cash for their purchases.
Meanwhile, Government has said that it will soon introduce
higher currency denominations of up to ZWL$10 and $20 notes. Economists say
while the RBZ was right to increase cash in circulation given the high demand,
it would take time before cash queues start to subside. The recommended cash
levels in circulation are 10 percent to 15 percent of money supply, which is
presently estimated at $19 billion.
This means Zimbabwe requires about $2 billion in physical
cash, yet there is about $720 million in circulation. Since the introduction of
new notes and coins in November, about $120 million has been injected into
circulation. The RBZ introduced new $2 coins and $2 and $5 notes following a
surge in demand for cash in the informal sector, which operates largely on a
cash basis or offers discounts for cash. Informal traders say that this allows
them to buy black market foreign exchange at a discount. The central bank has
stressed that low denomination coins have not been decommissioned and can be
exchanged at banks across the country for bigger denominations of notes or
coins. Herald
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