Banks act on cash crisis

Herald Reporters—
RESERVE Bank of Zimbabwe Governor Dr John Mangudya yesterday said local banks imported enough cash following a temporary shortage in the past few days that crippled operations. However, the central bank chief could not disclose how much was imported.Most automated teller machines ran out of cash this week due to growing demand as pay dates for most civil servants and the private sector coincided, Dr Mangudya said.

“February was a short month and demand for salary payments, for both the public and the private sector far exceeded the cash that was available.” The central bank governor encouraged the banking public to use plastic money, particularly given that the country was using multi-currencies, which it did not print and control.

“We have imported enough money, so the public should not panic. But I also urge people to use point of sale when transacting. It is a national responsibility for everyone, especially at a time we are not in a position to print money.”

Dr Mangudya said Zimbabweans should do away with the appetite for keeping “cash in their pockets.” There are local businesspeople who do not bank their daily takings, preferring to keep the money in safes at home, fuelling cash shortages. At the height of economic challenges in 2008, Zimbabwe opted for a multi currency regime anchored on the US dollar.

The objective was to stabilise the economy and establish a credible nominal anchor.

A survey conducted by The Herald yesterday showed that the situation had significantly improved with many ATMs now dispensing cash. Some banking officials confirmed that the situation had improved from previous days that saw some bank shutting downmany ATMs. “It was a temporary situation which was caused by huge demand by civil servants and workers in the private sector but the situation has improved,” said an official with a local bank.

Economic analysts said Government should also promote the use of plastic money and mobile financial services as attitude towards this had not been “very encouraging.”