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'Mnangagwa's govt will not print money'

by Staff reporter
27 Jun 2020 at 17:02hrs | Views
THE government will not print more money to alleviate the cash shortages in the country, Deputy Finance minister Clemence Chiduwa, has said.

Speaking in the National Assembly on Wednesday, Chiduwa said printing money would increase inflation.

"It is not difficult to print money and as we have said in the previous statements, the cash requirement for any economy in terms of the international benchmarks is between 10 percent and 15 percent of the notes and coins that are in circulation.

"At the moment, as I have alluded to earlier, the cash that we have is two percent but it is supposed to be 10 percent to 15 percent.

"The balancing act that we are playing here is, the moment we print cash, it is going to be misconstrued as an increase in money supply and if you increase money supply, it has a bearing on prices.

"So, it is a matter of us balancing what is happening in the market and then we continue to increase the cash in drips as we said in our earlier statement," Chiduwa said.

He said the government will continue to review cash withdrawals.

"In terms of management of cash withdrawals by banks, the cash limit was reviewed from $300 to $1 000 per week and will continue to be reviewed in line with inflation trends and improvement in the cash situation in the country.

"Government took a decision to increase the quantity of bank notes and coins in the local market to try and reduce the premium being incurred on cash and to give the public more access to their cash balances with financial institutions.

"Following that decision, the bank imported additional bank notes and coins to the tune of $400 million and the currency in circulation has increased to $1,04 billion over the year up to April 2020," he added.

This comes as bank queues continue to be witnessed around the country as many people are struggling to withdraw the Zimbabwe dollar.

Source - Daily News