Cash crisis escalates

Cash crisis has escalated with several banks now limiting clients to a mere $50 withdrawal limit per day.

The Reserve Bank of Zimbabwe and government say the cash shortages are caused by liquidity challenges due to lack of foreign direct investment, the shrinking industrial base and other internal and external factors.

This is despite RBZ pumping  more than $80 million worth of bond notes into circulation, state controlled Chronicle reported.

An unnamed  ZB bank official is quoted saying they were reducing the withdrawal limits based on a day to day assessment of the queues.

"We apply withdrawal limits at different times of the month, based on how many depositors would have come through on that day.

"When it's pay day for civil servants and pensioners we have many people coming in so giving them huge amounts of money would not be practical. But come mid-month we can give out as much as $300 (weekly withdrawal limits) at one go".

 The country experienced critical shortages of cash in the first quarter of 2016, especially the United States dollar, a situation which led to the apex bank to introduce the notes as a corrective measure.

In November 2016, the authorities said bond notes have been given the same value as the US dollar and were to be used side by side. Their issuance was backed by a US$200 million facility from the Cairo based African Export and Import Bank (Afreximbank).

The bond notes were introduced to solve the issue of cash shortages even though there have been issues with its use and value. There were protests last year against its introduction but the government went ahead with it.