Zim cash crisis: Central bank imports $400m

2018-05-14 12:37
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Zimbabwe's central bank chief has promised that chronic cash shortages will ease within two months' time, which will also be around the time Zimbabweans go to the polls.

John Mangudya said his bank had imported $400 million worth of cash for the local market since January, and also expected foreign currency inflows to quicken from the sale of gold and tobacco - Zimbabwe's top foreign currency earners.

Increased supply

"What I want to promise the nation is that within the next two months, the (bank) queues are going to be minimised," Mangudya said, in an opinion editorial published in state media on Sunday. 

"Starting from the end of this month, we should see increased supply of cash on the market as we get more money from tobacco, increased gold exports as well as increased supply from our lines of credit so that we get more cash into the economy," he said.

Cash hoarding

For two years now Zimbabwe's worsening cash shortages have caused misery for locals trying to withdraw their money from banks. Cash is still in demand by many here, especially for things like bus fares, though plastic money and electronic payments using cellphones now account for 96% of local transactions.

Mangudya said ordinary Zimbabweans were worsening the crisis by hoarding whatever cash they do get their hands on.

"We now invest in having foreign currency, which stops the (US dollar) from circulating effectively on the formal markets," he said. 

High government spending

Zimbabwe’s foreign currency crisis has been caused by high government spending, and an import bill that exceeds exports. The government is pushing for greater local production to boost the economy, but local manufacturers still require foreign currency to import raw materials.

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