Finance and Economic Development Minister Professor Mthuli
Ncube told journalists after yesterday’s Cabinet briefing that the decision to
ban cash-in, cash-out and cash-back transactions was motivated by the desire to
reduce the burden on citizens who were needlessly losing value for their money.
“The feeling here was that on the cash-in, cash-out
transactions, there was an implicit exchange rate that was applying because of
the discounts that these agents were applying; discounts as high as 55 percent
or 60 percent on RTGS balances.
“That’s what (brought) that directive from the Reserve Bank
of Zimbabwe. That is what it is trying to deal with, to make sure that it
(discounts for cash) does not become yet another rate,” said Prof Ncube.
He said the country was going back to multiple exchange
rates and the RBZ ban seeks to try “to close that gap”.
“Then over time, obviously cash in circulation will be
increased; so we should expect that to happen,” said Prof Ncube.
Economist Mr Persistence Gwanyanya said the reaction by RBZ
on the cash-in, and cash-out transactions “was ostensibly driven by the need to
restore sanity in the financial services sector”.
“Given the RBZ’s primary duty to ensure price and financial
services sector stability, the intervention of RBZ is unsurprising as our
enterprising population was increasingly abusing the cash-in, cash-out facility
by selling cash at exorbitant rates of up to 60 percent.
“However, what is more important is to understand the
drivers of these unscrupulous behaviours for more effective policy
intervention.
“We expected RBZ to concurrently increase the cash in the
economy to recommended levels of 10 percent to 15 percent of money supply,
which is also the desired level RBZ indicated in the recently announced
Mid-Term Monetary Policy Review,” he said.
With the current money supply level of around $15 billion,
cash in circulation should be between $1,5 and $2,25billion.
Presently, there is about $600 million cash in circulation,
which Mr Gwanyanya said was “way lower than the required amounts”.
“Whilst it may appear obvious that RBZ should simply
increase cash in circulation, the issue is a bit complicated as the leadership
has already indicated that the bond notes and coins are on their way out, with
new currency coming.
“So it’s illogical to increase the amount of money that is
being phased out, which speaks to the need to expedite the new currency that
was spoken about by the President himself,” said Mr Gwanyanya. Herald
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