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RBZ to inject more cash

by Staff reporter
02 Oct 2019 at 18:16hrs | Views
The Reserve Bank of Zimbabwe has capped the Cash-Out amount at any payment system provider and agent at ZWL$100 after putting in place enhanced monitoring mechanisms  to mitigate against abuse of payment systems.

On Monday, the RBZ banned Cash-In and Cash-Out transactions in order to protect the public against the exorbitant charges being charged by agents. However even after the ban, the premium rate on cash shot up to 70% as most resorted to transact on individual lines instead.

In a press statement, RBZ governor John Mangudya lifted the ban on the cash out facility by capping it at ZWL$100, which is within range of the amounts people cash out on average (for transport and small items). Mangudya however said that existing operational cash in and cash back limits will remain. He also said that those who abuse the system will be brought to book.

The revision comes after Cassava Smartech, parent company to the largest mobile payment system in the country had applied to the High Court for an interdict to reverse the ban on the cash in and cash out facilities. The case will be heard on Friday by Justice Chitakunye.

Mangudya noted the importance of mobile payment systems particularly the contribution to financial inclusion and stability. Mobile money has proven to be a viable alternative to formal financial services in fragile statesâ€"where achieving financial inclusion is challenging. According to the IMF, currently, more than half of the 42 fragile states have mobile money services. In these states, on average, for every commercial bank branch there are close to 47 mobile money agents, providing the population an additional way to access finance.

As a way of dealing with the premium rates on cash, Mangudya said that the central bank will be injecting notes and coins into the economy without changing money supply. "In this regard, banks will exchange existing RTGS balances for cash thus maintaining the monetary base unchanged."

Source - FinX