Accessibility links

Breaking News
News

Zimbabwe Cash Crisis Seen Lasting With Too Little Cash In Circulation


Shortages of cash continued in Harare, Bulawayo and other Zimbabwean cities Friday and the crisis did not seem likely to end soon according to central bank sources who said there are simply not enough bank notes in circulation to meet consumer and business demand which has been pumped up by hyperinflation.

The central bank sources, speaking on condition of anonymity, said Zimbabwe needs some Z$700 trillion cash in circulation - but even with recent infusions by the Reserve Bank of Zimbabwe the primary money supply is not far over Z$100 trillion.

The government stopped issuing inflation data several months ago, but independent estimates range up to a 12-month inflation rate of 100,000%. A loaf of bread costs between Z$1 million and Z$1.5 million in parallel market food dealings.

There were long queues at banks in Harare and Bulawayo today with the maximum amount of cash disbursed to customers varying by institution.

Sources in Bulawayo said Kingdom Bank, Commercial Bank of Zimbabwe and Beverly Building Society were limiting customers to withdrawals of $20 million .

In Chinhoyi, northwest of the capital, local sources said the only banks with cash were Barclays, Zimbank and Standard Chartered, with no functioning ATMs in the city.

Many caught in the queues at banks are bracing for worse as shopping for clothing and supplies for the forthcoming post-holiday school term picks up.

Correspondent Thomas Chiripasi told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that only a handful of banks were disbursing cash in the capital.

Meanwhile, nearly two weeks after the introduction of new bank notes, some shops in rural areas of the country have been refusing to accept the new notes because they have not received word of their issuance by the Reserve Bank.

When RBZ Governor Gideon Gono announced the issuance of bearer cheques for Z$250,000, Z$500,000 and Z$750 000, he said teams from the central bank would fan out into rural areas to distribute the new notes and take in the Z$200,000 notes initially scheduled to expire December 31 but reprieved earlier this week.

Rural sources said central bank teams have been spotted in Mashonaland and the Midlands, but Matabeleland villagers haven't seen any central bank officials.

Villager Siyabonga Malandu Ncube of Insiza, Matabeleland South, said thousands of rural dwellers were unaware of the currency changes due to poor communications.

More reports from VOA's Studio 7 for Zimbabwe...

XS
SM
MD
LG