Mthuli Ncube refuses to increase cash withdrawal limits

FINANCE minister Mthuli Ncube says there is no need to increase the weekly $2 000 bank withdrawal limit for individuals as a move to combat the black market.

This comes as the Treasury chief and the Reserve Bank of Zimbabwe (RBZ) last year introduced a number of measures, including limiting the amount people could transact on daily basis on mobile money transfer platforms and introducing a foreign currency auction system.

These resulted in the Zimbabwe dollar stabilising against the greenback, while prices of basic commodities have also remained reasonably stable .  

Speaking in the Senate on Thursday, Ncube said once the authorities increase the amount of cash people can withdraw from the bank, there was a danger the notes would be channelled towards the parallel market.

"The issue about regulating access to cash was triggered by the abuse that we had seen taking place from the use of the mobile banking platform in terms of electronic money.   

"We realise that it is necessary to restrict the cash withdrawals, the amounts that can be used at any point in time and be transferred at any point in time.  

"This is necessary for us to keep those restrictions in place as a general policy.  If we loosen up on that, it will cause us a lot of difficulties and basically, we will go back to where we were before, where individuals will access larger amounts of cash and then want to trade in the parallel market and just make our currency more unstable," Ncube said.

He said the government is concentrating on making sure that the country's currency remains stable.

Local currency is trading at about $84 to the US$.

"I think you will agree with me that at the moment, the most valuable thing from a micro-economic sense is stability of our currency which is spreading stability and creditability everywhere and that is a fact we must all work to protect," Ncube said.

This comes after RBZ governor John Mangudya recently said the central bank would soon be introducing a $50 note to augment the current stock of bank notes in circulation.

He said the central bank's focus on fostering price and financial system stability in the economy requires team effort by all Zimbabweans to enhance self-discipline and compliance, and to cherish economic progress.

"The Bank's Exchange Control Inspectorate and the Financial Intelligence Unit (FIU) have enhanced their monitoring and surveillance on the utilisation of foreign exchange in the market to foster market discipline.

"Banks and mobile banking institutions are obliged to ensure that the Know Your Customer (KYC) and Customer Due Diligence (CDD) principles are complied with at all the times," Mangudya said.

The central bank chief said enhancing the FIU would ensure that authorised dealers or banks and foreign exchange auction system participants comply with auction rules and regulations to curb abuse of the foreign exchange auction and safeguard the auction from "being abused as a breeding ground for arbitrage opportunities".