‘TBs not to blame for cash shortages’

Government has denied the issuance of Treasury Bills (TBs) had caused the current cash shortages, saying it had honoured its obligations on all debt instruments it has issued.

Some reports had blamed Government for partly causing the cash crisis through increased borrowings on the domestic market.

The Government, with no access to balance of payment support, resuscitated the TB market in October 2012.

And, after initially struggling to convince a skeptical market, the TBs have become one of Government’s primary vehicles for fundraising.

Finance and Economic Development Minister Patrick Chinamasa said recently the notion that government had caused the cash squeeze was not true.

Zimbabwe, which is using the United States dollar as its chief currency, is battling cash shortages that have been triggered by a number of issues, among them high appetite for imports and externalisation.

“We have faithfully honoured all Treasury Bills, all debt instruments that we have issued,” he said recently in Parliament.

“We have never heard the market complaining.”

To mitigate the cash shortages, government has introduced a raft of measures including limiting cash withdrawals, and will introduce bond notes in October this year, a medium of exchange that will be equivalent to the greenback.

Analysts contend that Zimbabwe’s economic recovery efforts could be hampered, if the cash shortages persist.

Recently the Chamber of Mines said Zimbabwe risked losing up to four months of mineral production this year due to the prevailing cash shortages.

Mining, Zimbabwe’s second largest foreign currency earner after agriculture, is one of the sectors expected to anchor economic recovery. — New Ziana.