THE government will not print more money to alleviate the
cash shortages in the country, Deputy Finance minister Clemence Chiduwa, has
said.
Speaking in the
National Assembly on Wednesday, Chiduwa said printing money would increase
inflation.
“It is not difficult to print money and as we have said in
the previous statements, the cash requirement for any economy in terms of the
international benchmarks is between 10 percent and 15 percent of the notes and
coins that are in circulation.
“At the moment, as I have alluded to earlier, the cash that
we have is two percent but it is supposed to be 10 percent to 15 percent.
“The balancing act that we are playing here is, the moment
we print cash, it is going to be misconstrued as an increase in money supply
and if you increase money supply, it has a bearing on prices.
“So, it is a matter of us balancing what is happening in
the market and then we continue to increase the cash in drips as we said in our
earlier statement,” Chiduwa said.
He said the
government will continue to review cash withdrawals.
“In terms of management of cash withdrawals by banks, the
cash limit was reviewed from $300 to $1 000 per week and will continue to be
reviewed in line with inflation trends and improvement in the cash situation in
the country.
“Government took a decision to increase the quantity of
bank notes and coins in the local market to try and reduce the premium being incurred
on cash and to give the public more access to their cash balances with
financial institutions.
“Following that decision, the bank imported additional bank
notes and coins to the tune of $400 million and the currency in circulation has
increased to $1,04 billion over the year up to April 2020,” he added.
This comes as bank
queues continue to be witnessed around the country as many people are
struggling to withdraw the Zimbabwe dollar. Daily News
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