Business / Economy
Cash shortages persist in Zimbabwe
29 Apr 2016 at 07:15hrs | Views
Zimbabwe has been experiencing cash shortages for over a month and the central bank now hopes proceeds from tobacco will help ease the cash crunch, state media reported on Thursday.
The latest cash crisis started in March and the authorities attributed it to payment of bonuses to government employees and people keeping money outside the formal banking system.
The Governor of the Reserve Bank, Zimbabwe's central bank, John Mangudya, last month said he had asked the African Export-Import Bank for 200 million U.S. dollars to mitigate the crisis.
Banks have since introduced stringent cash management systems including limiting withdrawals, switching off ATMs and de-activating the Zimswitch facility which processes ATM and Point of Sale transactions in most banking institutions.
The Herald newspaper reported that some retail supermarkets that usually give cash backs were only giving the cash to customers who purchase goods worth 30 dollars and above.
The deputy president of the Bankers Association of Zimbabwe, Webster Rusere, was quoted by the newspaper as urging the public to use credit cards to avoid cash limitations.
"We are aware of the cash shortage, but measures are being put in place to address that," he was quoted as saying.
Mangudya also said the situation was expected to improve as tobacco inflows picked up.
Tobacco is Zimbabwe's major foreign currency earner and this year's tobacco marketing season opened last month.
"Cash importation is a process, but we expect the situation to normalize as tobacco inflows begin to filter through," he said.
Instead of limiting imports, the central bank was working with the business community on a priority list of imports so that only critical products and services were imported to ensure less cash was spent, according to Rusere.
The latest cash crisis started in March and the authorities attributed it to payment of bonuses to government employees and people keeping money outside the formal banking system.
The Governor of the Reserve Bank, Zimbabwe's central bank, John Mangudya, last month said he had asked the African Export-Import Bank for 200 million U.S. dollars to mitigate the crisis.
Banks have since introduced stringent cash management systems including limiting withdrawals, switching off ATMs and de-activating the Zimswitch facility which processes ATM and Point of Sale transactions in most banking institutions.
The Herald newspaper reported that some retail supermarkets that usually give cash backs were only giving the cash to customers who purchase goods worth 30 dollars and above.
"We are aware of the cash shortage, but measures are being put in place to address that," he was quoted as saying.
Mangudya also said the situation was expected to improve as tobacco inflows picked up.
Tobacco is Zimbabwe's major foreign currency earner and this year's tobacco marketing season opened last month.
"Cash importation is a process, but we expect the situation to normalize as tobacco inflows begin to filter through," he said.
Instead of limiting imports, the central bank was working with the business community on a priority list of imports so that only critical products and services were imported to ensure less cash was spent, according to Rusere.
Source - Xinhua
