Dollar shortages threaten Zim businesses

HARARE - Zimbabwean businesses are seeing tumbling output because of an acute dollar shortage that has forced banks to delay processing payments for imports of spare parts and supplies, a KPMG poll found.

This comes as cash in circulation has dwindled to 1,4 percent of total deposits in the banking sector, according Reserve Bank of Zimbabwe deputy governor Kupukile Mlambo.

At least 76 percent of businesses said the shortages of bank notes had adversely affected their businesses, 17 percent said the impact has been moderate, two percent felt no impact, and 6 percent experienced a positive impact.

The central bank says cash shortages are caused by the illegal export of dollars and lower exports at a time when Zimbabwe’s imports are growing, resulting in a widening trade deficit.

Comments (2)

As the article says, in plain English no less, cash in circulation (in circulation where?) has dwindled to 1.4% of total deposits in the banks. That says to me that the banks are holding onto millions of US dollars cash or Bond notes. Why are they doing that? Why then are banks not able to process the payments of imports of spare parts and supplies. Truly a strange story.

Homo Erectus - 17 July 2017

This situation is sad but i feel three reasons are causing this; 1. Its no longer feasible for people in the diaspora to send hard cash to zim because the adopted currency is more powerful than currencies were most remittances come from e.g south africa. 2. Aggronace of police and general public towards foriegners makes it difficult for toursits to come to zim and sometimes business people looth driving to zim beacuase of the so many roadblocks and ridiculous demands. locals demean people in the diaspora to the point that most are no longer comfortable to come home unless of major family issues. 3. Spending money on none essentials like the hoards of ex jap cars that usually dont last for more than 5 years.

Levis - 17 July 2017

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