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'Zimbabwe's $5 000 withdrawal limit no longer adequate'

by Staff reporter
02 Feb 2023 at 08:24hrs | Views
THE transacting public has implored the Reserve Bank of Zimbabwe (RBZ) to consider increasing cash withdrawal limits saying the weekly $5 000 cap is no longer convenient given the exchange rate movements.

As RBZ Governor, Dr John Mangudya, is expected to present his 2023 Monetary Policy Statement to buttress the National Budget pronouncements announced last November, the public expects the authorities to also review withdrawal limits.

The Apex Bank last increased cash withdrawal limits in February last year to $5 000 per week from $2 000, which is now not enough for weekly transport fares for one person.

A snap survey conducted by the Business Chronicle in Bulawayo revealed that members of the public were struggling to get cash for transport every day with many being forced to resort to parallel market dealers who demand hefty premiums in exchange for electronic money.

Consumers said the $5 000 withdrawal amount is not adequate considering that prices of basic commodities were increasing almost every month in line with exchange rate changes while other services were only accessible on a cash basis, especially in the informal market sector.

This week the local dollar is trading at 1:801 at the official Auction System against the United States dollar, from 1:779 last week while the parallel market is above.

Some consumers have since suggested that the RBZ increases withdrawal limit in line with the costs of a family and that this be periodically reviewed to cushion the public.

"An individual now needs more than $5 000 to commute to work per week. It's now critical for the authorities to increase the weekly limits to cater for people with big families that require transport money daily.

"A limit of $30 000 would be adequate for a start," Mr Albert Tshabalala, a Bulawayo resident said.

Another consumer, Mr Bivens Ndlovu said although there is an upsurge in the use of plastic money, some people still rely on hard cash for daily transactions.

"People use swipe most of the time but petty cash is needed and $5 000 is now too low. I would recommend a limit of $25 000 and it should be periodically reviewed," said Mr Ndlovu.

Miss Sithembile Sibindi also said: "$5 000 is no longer sufficient. I believe there's a need for RBZ to increase to at least $30 000 a week. People should be allowed to withdraw all their money as the amount we are earning is not enough," she said.

"We also need to pay for transport as different members of the family every day."

With the highest local note being $100, the demand for more cash is likely to induce pressure on the demand for notes in circulation at a time when authorities have been maintaining a tight stance on the money supply side.

The local dollar has been losing grip at the auction system, which resumed trading two weeks ago and saw the official rate moving from US$1: $705 to US$1: $732 before last week's further shift.

People queue for cash withdrawals at a Bulawayo bank (File picture)

When the auction system closed in mid-December for the festive holiday season, the official exchange rate was pegged at US$1: $671,4.

Finance and Economic Development Minister, Professor Mthuli Ncube, last year hinted on the need to maintain withdrawal limits at a more meaningful level in tandem with inflationary pressures.

Source - The Chronicle
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