Zimbabwe banks downplay ZWG shortages

Zimbabwe's banking sector has sought to downplay reports of severe liquidity shortages following the introduction of the new Zimbabwe Gold (ZWG) currency by the Reserve Bank of Zimbabwe (RBZ) on April 5. Despite acknowledgments from retailers and transport operators about a scarcity of physical cash, the Bankers Association of Zimbabwe (BAZ) asserted that there were no liquidity shortages from their perspective. They stated that banks order cash from the central bank based on anticipated customer demand and denied claims that banks were withholding a significant portion of cash received from the RBZ.

These statements conflicted with remarks made by Finance Deputy Minister David Mnangagwa, who alleged that banks were only releasing 30% of the cash supplied by the RBZ, implying a broader issue of cash distribution beyond the central bank's control. RBZ Monetary Policy Committee member Persistence Gwanyanya defended the central bank's actions, claiming they had injected adequate liquidity into the market and were willing to intervene further if necessary to ensure sufficient cash flow.

Meanwhile, the Confederation of Zimbabwe Retailers (CZR) confirmed the shortage of ZWG currency, which has compelled retailers to offer small items like buns and chocolates as change due to the lack of smaller denomination coins. CZR economist Innocent Marimo acknowledged consumer concerns and emphasized ongoing engagement with the RBZ to increase the availability of ZWG in the market. Analysts like Ranga Makwata warned that continued difficulties in accessing the new currency could disrupt business transactions and create uncertainty among consumers.

Overall, while the banking sector denies liquidity shortages, reports from retailers and transport operators indicate ongoing challenges in accessing sufficient physical cash, highlighting the complexities in Zimbabwe's monetary landscape under the new currency regime.