Depositors, who formed long queues at banks and building
societies, were withdrawing new coins and notes yesterday after the Reserve
Bank of Zimbabwe (RBZ) released the first $30 million on Monday, but most banks
had run out of cash by midday.
Most banks limited withdrawals to between $50 and 100,
while a few allowed the full $300 weekly ration.
Even with the modest withdrawals, premiums charged by
dealers selling cash for mobile transfers started falling yesterday as cash
supply rose and market demand fell.
Premiums were 25 percent for coins and 30 percent for
notes. Measures by the RBZ can stop cheating by banks, but cannot stop those
withdrawing their small sums from doing pretty much what they like with the
notes and coins they withdraw.
Cash barons at Mbare Musika and other places were starting
to trade in the new $2 coins and $2 and $5 notes by afternoon yesterday.
Some were buying from the full-time queuers, people who
queue early every day, sometimes sleeping on the pavement outside a bank, and
earn their living from withdrawing cash that they sell for a premium.
In many cases, those withdrawing cash from a bank wanted to
spend it quickly with vendors or tuckshops that offer lower prices for cash
transactions.
These traders often sell at cost to attract customers and
then sell the cash they receive to make their profits.
Well-organised systems have arisen that get cash from
vendors to cash barons quickly and these appeared to be coping with the new
notes yesterday.
Supermarkets and other retailers who follow the law and
charge the same prices regardless of payment method had insignificant numbers
of customers using cash.
This would imply that the new cash will largely join the
old bond notes and coins in the informal sector until the premium for cash
vanishes.
The premium is a little higher than the percentage discount
tuckshops in effect offer and the gap between black market exchange rates for
cash or mobile money.
That modest extra on the premium covers the dealers’ profit
as they have to buy cash before they sell it, and so have their own margin.
Steps taken by the RBZ were likely to stop suitcases of
cash being moved from banks to cash or forex dealers, but could not stop the
small withdrawals by individuals being accumulated by dealers.
Long queues characterised most banking halls as depositors
stampeded to access the new notes and coins.
All banks in Harare’s central business district (CBD) were
dispensing cash yesterday morning.
At Eastgate Mall, NMB Bank depositors withdrew $100 per
person and $200 for companies, while Steward Bank will allow withdrawals from
early morning today.
CBZ Bank Kwame Nkrumah and First Street branches allowed
withdrawals of $100 per head, amid long queues, which grew as the day
progressed.
Zimbabwe’s largest bank allowed customers to withdraw cash
from Automated Teller Machines (ATMs) too.
Standard Chartered allowed withdrawals of up to $300 per
individual, while ZB bank permitted $100 in the morning before it ran out of
cash later in the day.
At CABS, the withdrawal range stretched between $50 to $100
with those possessing the textacash card getting $50 and those with the blue
accounts receiving $100.
RBZ governor Dr John Mangudya said yesterday that the
central bank will continue to drip-feed the market with notes and coins until
the state of equilibrium is reached.
The central bank intends to increase the amount of cash in
circulation to about 10 percent of total money supply, which translates to
roughly $1,9 billion.
“We said that we will do it on a gradual basis, number
one,” he said. “Number two, when a bank runs short of money what it means is
that they should come to us the Reserve Bank, contact our bank operations to
ask for more money.
“You should look at a bank like an individual (in need of
cash). If you run short of money you go to the ATM to withdraw more; that is
true with banks as well. When the banks run short of money they come to us.
“The banks do not also know their exact demand yet because
they have been short of cash to give their customers for a long period of time;
so to quantify the demand is difficult for the banks for now.”
Dr Mangudya said the process of injecting additional cash
went smoothly on the first day, but the RBZ will continue to top up banks with
cash to meet demand, but in line with individual banks’ limits.
The central bank chief said the RBZ could stop cheating by
banks and would strictly monitor compliance with bank use and promotion
regulations to thwart and eliminate misconduct.
He said the RBZ keeps records of all the cash it disburses
to banks and would be able to know the culprit if one releases stashes of cash
irregularly.
The Herald visited cash barons plying their currency
trading activities at Mbare Musika and found that the new notes had already
found their way on to the black market.
However, high premiums of up to 50 percent which cash
traders used to charge the desperate cash seekers had declined significantly to
30 percent.
Abel Muringani, a cash baron in Mbare, said premiums being
charged for cash had significantly dropped and people were no longer
frequenting them for cash, something he attributed to the arrival of the new
notes.
“The premiums we used to charge a few days ago and the
premiums we are charging now are totally different because the cash rates have
taken a nose dive,” he said.
“We used to charge 60 percent, but now they have dropped to
30 percent and it’s killing our business because people don’t come to us for
cash as much as they used to anymore because they are expecting cash to be
there in banks.”
Following the release of cash by RBZ, ordinary people on
the streets implored authorities to maintain constant supply of money to
eliminate the sale of cash. Herald
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