No 'quick solution' in sight to Zim cash crisis – finance minister

2016-12-22 10:00
Patrick Chinamasa (File: AFP)

Patrick Chinamasa (File: AFP)

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Cape Town – Zimbabwean Finance Minister Patrick Chinamasa has reportedly said that the cash crisis in the southern African country is set to continue for a long time.

This was despite the Reserve Bank of Zimbabwe (FBZ) having injected $29.6m worth of bond notes into the banking sector to ease the cash crisis.

According to News Day, Chinamasa said there was no "quick solution" in sight to the cash problem, as long and winding queues continued to be the order of the day at most banks.

"The central bank will do its best to bring more bond notes, but bond notes will not solve the cash challenges overnight," Chinamasa was quoted as saying.

Chinamasa said he would not release too many bond notes at once as it would disturb economic performance.

The RBZ started issuing bond notes, its own currency equivalent to the US dollar in November in an attempt to avert a liquidity crunch that has left the country's money markets and national economy paralysed.

The country has used multiple foreign currency, including the greenback since 2009 after a rate of inflation that peaked as 500 billion % rendered the Zimbabwe dollar unusable. 

News24 reported recently that the majority of Zimbabweans were failing to access the surrogate currency. Some braved the sometimes wet and chilly weather to join bank queues at night in order to increase their chances of accessing the limited amounts being offered to depositors by financial institutions. 

RBZ governor John Mangudya on Tuesday reportedly doubled the withdrawal limit of bond notes to $100 per day and introduced $12m more of the surrogate currency to "smoothen transactions during the festive season".

But, bank officials said they awaited official communication from the RBZ boss.

Read more on:    john mangudya  |  patrick chinamasa  |  zimbabwe  |  southern africa

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