RBZ moves in to tame a cash shortage in Zimbabwe

THE Reserve Bank of Zimbabwe (RBZ) has moved in to tame a cash shortage that saw some banks running out of money since Friday last week.

A snap survey in Bulawayo showed that banks such as the People's Own Savings Bank (POSB) branches had no cash over the weekend to Monday.

Those wanting to withdraw their cash were told to wait for cash from depositors.

The situation was the same at ZB Bank branches where depositors spent several hours in the queue only to withdraw a maximum limit of $100.

Similar reports were made in the Midlands province where gold miners failed to get money from ZB Bank-run gold buying points between Friday and Saturday.

ZB runs the centres on behalf of Fidelity Printers and Refineries, the country's sole gold buyer.

Central bank governor, John Mangudya, on Monday acknowledged the shortage but said the monetary authority had moved in to disburse cash to Bulawayo banks.

The situation was expected to have normalised by yesterday.

"It has been brought to our attention that some banks in Bulawayo had run out of cash since Friday. And this was a temporary cash challenge emanating from the fact that some of the banks had underestimated their cash requirements and had what they thought was normal despite being a monthend when companies would be paying salaries," said Mangudya.

"We've this (Monday) afternoon disbursed cash to the banks in Bulawayo."

He said since the country was importing money, it was imperative for banks to plan ahead as they were logistical issues that required to be sorted out to ensure availability of money in the economy.

Since the adoption of the multi-currency system in 2009, the apex bank has not been printing money and the economy has been dominated by the United States dollar.

Other currencies such as the rand, pula, pound, yuan are also used for trading purposes.

"Going forward, as the central bank and the Bankers Association of Zimbabwe (BAZ), we need to plan to avoid the cash crisis particularly during the festive season when demand for cash is high taking into consideration that the country is a cash economy as opposed to use of cards," Mangudya added.

An official from a ZB Bank in Bulawayo admitted the bank had experienced a cash shortage.

"The challenge that you're referring to was experienced last week so, now there's nothing to talk about because it has been sorted. It was just a minor glitch," said the official who declined to be named.

Comment could not be obtained from POSB.

In his 2015 mid-term monetary policy statement, Mangudya said the banking sector's aggregate core capital base had increased significantly by 19 percent from $753.3 million to $899.10 million from June 30 last year to June 30 this year.

He said growth in the aggregate core capital position was largely underpinned by increased retained earnings.

"As at June 30, 2015, all operating banking institutions were in compliance with the prescribed minimum capital requirements."

In terms of the banking sector performance, Mangudya highlighted that financial institutions remained profitable with an aggregate net profit of $43.01 million (excluding Tetrad Investment Bank - under provisional judicial management) for the half year ended 30 June 2015, up from $26.53 million during the corresponding period in 2014. A total of 14 out of 18 operating banking institutions recorded profits for the half-year ended June 30, 2015.

Losses which were recorded by the remaining institutions were mainly attributed to increased levels of provisions.

Such provisions, Mangudya said, had been narrowing over the period under review.

"To enhance earnings performance, a number of banking institutions continue to rationalise operating costs, while simultaneously implementing revenue enhancing measures, which include growth of non-funded income through introduction of new technology driven products and corporate finance structures," he said.