Zim cash crisis worsens

HARARE - Zimbabwe’s severe cash crisis is worsening, forcing banks to reduce further their daily withdrawal limits — in addition to suspending dispensing money through Automated Teller Machines (ATMs).

This prompted analysts who spoke to the Daily News yesterday to say that this confirmed that the local economy was dying and “hurtling towards total collapse”.

It also comes as most banks are now disbursing a maximum of $30 dollars a day, down from their usual $100 — while those that had capped the maximum withdrawal limit at $500 a week have pulled this back to $200.

The cash shortages are also continuing to worsen despite the recent opening of the tobacco marketing season, where more than $47 million worth of the leaf has so far been sold.

Economic advisor to President Robert Mugabe, Ashok Chakravarti, told the Daily News yesterday that the escalating cash crisis was a result of “long-term problems” that came after the country opted to have one of the world’s strongest currencies, the US dollar, as its anchor currency.

“We have close to $6,5 billion in deposits and at the end of January we had a little over $300 million in cash circulating.

“Under such circumstances, it only makes sense that we have shortages. Do not blame the banks, it is not their fault, they are only looking for a coping mechanism,” Chakravarti said.

He recommended that the government should adopt the South African rand and ditch the dollar.

“I have said this before, we need a weaker currency. The weaker, the better for us. As South Africa has just been downgraded, this is an opportune time. What we just need is a weaker currency,” he added.

Veteran economist John Robertson said the cash problems were going to persist until the government urgently fixed the country’s economic fundamentals.

“This has been going on for the past year and in my view, the situation is not likely to improve in the near future because economic fundamentals remain the same.

“Government’s wage bill still makes up the majority of deposits and as soon as those deposits are recorded, civil servants want to withdraw the money. But there is essentially no money in the system . . . Not even tobacco earnings will save us this time” Robertson said.

The Reserve Bank of Zimbabwe (RBZ) increased the bond notes withdrawal limit from a maximum of $150 a week to $100 per day, and $300 per week towards the end of last year.

It has so far injected $102 million worth of the surrogate currency into the system.

The cash shortages come as there are growing fears that the country’s economy may soon hit the disastrous lows of 2008 — as bond notes continue to lose their value against the United States dollar, with the coveted greenback now almost completely unavailable on the open market.

At the same time, economists have previously told the Daily News that poverty levels in the country are skyrocketing, with average incomes now at their lowest levels in more than 60 years — and with more than 76 percent of the country’s families now having to make do with pitiful incomes that are well below the poverty datum line of more than $500.

Mugabe and his warring ruling Zanu PF, in power since Zimbabwe’s independence from Britain in 1980, stand accused of turning the once-thriving local economy, which at one time was regarded as the bread basket of Africa, into a much-derided basket case.

Comments (13)

so release the 6.5billion onto the market .hanti its in the banks . irirpi mari iyoyo ???

tan tan - 5 April 2017

We said it here not so long that the coming of the bond was going to spoil everything last year this time we would withdrwa our monies from the bank i mean USD without any problem then this stupid Magudyia thought he was clever brought the useless zim dollar through back door called it bond .Now once again we are stranded .The easiest thing to get rid of this crisis is to remove zanu from power just that . Change is the only our last hope . Remove Mugabe next year .

Diibulaanyika - 5 April 2017

The reason why the bond was introduced was to steal all the 200 m USD which was in circulation and then use it for rigging elections purposes bcoz international crooks can only take USD in order to do their dirty tricks . Otherwise they is no clear reason from 200m to 6m in circulation how did that happen all what we get is vague reasons . The money has been stolen

Dave - 5 April 2017

the greenback is a reserve currency and unfortunately our country is become a cheaper source. foreigners are bringing goods and never bank the money.Our gvnt must maximise production so that money circulates.Capital must be attracted by good policies not what is currently obtaining

majorzib - 5 April 2017

the only money that shall be left in this economy are those Bond Notes. The Us$ is now scarce as people resort to "PillowBanking" whilst looking forward to the decline in value of the Bond note at the same time hoping that they might turn into overnight millionaires. #TheWorstIsYetToCome

eddy - 5 April 2017

Pillow banking - the term used by Strongman Comrade Robert G Mugabe when he said in his birthday interview that even he does not bank money in ZW - the banks he said were naughty and sometimes refused to give it back.

nelson - 6 April 2017

I have said this before that before mid year the USD will completely vanish from the formal market after the introduction of bond notes,and here we are ,stark in the middle of nowhere.Simple economics dictates that as long as you are not producing anything worthwhile which brings foreign currency,no matter what kind of raft measures a government comes up with,the decline of the economy will decline unabated.Shortages of money and basic goods becomes order of the day.Exactly our position at this juncture.The only practical solution to our dilemma is to kick out this clueless zanu pf mafia government from power come 2018 elections and vote for a government that appreciates basic economics and the will of the people.This thieving government has cause so much suffering to most Zimbabweans,they have killed ,tortured,displaced,maimed innocent citizens and have made a lot of people beggers and landles since they assumed power from Britain colonisers in 1980.They have actually outdone our former colonisers in terms ofb making people suffer.

Janana wa Bikaz - 6 April 2017

Haaleluja Janana you said it all he who has ears has heard , Some pple here even think the govt can do something about the crisis but they forget we had been living without a govt since 1980 and that without viable private sector no govt can survive . But this govt chased away private companies including 51 percent Kasukuwere madness worsened the situation shuwa who is going to bank now when everyone is not making money bcoz they are not working or their businesses are not producing anything

Diibulaanyika - 6 April 2017

Do you need loan to pay off your bills apply now and get your loan amount within 4hrs on 3%

Smaterfirm - 26 April 2017

i am sorry for learned economist on his economic facts which would have been very help full if smith was in power

francis muranganwa mutsvairi - 13 May 2017

i am sorry for learned economist on his economic facts which would have been very help full if smith was in power

francis muranganwa mutsvairi - 13 May 2017

zimbabwe is not a basket case but a bread of africa. Robertson will never see anything done by an african as good unless if a white man is in rule.his mentality that every thing done by an African is b ad and anything done by a white man is good,he has outlived our hand of reconciliation.

francis muranganwa mutsvairi - 13 May 2017

zimbabwe is not a basket case but a bread of africa. Robertson will never see anything done by an african as good unless if a white man is in rule.his mentality that every thing done by an African is b ad and anything done by a white man is good,he has outlived our hand of reconciliation.

francis muranganwa mutsvairi - 13 May 2017

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.