New notes excite market

THE Reserve Bank of Zimbabwe (RBZ)’s move to inject new notes and coins into circulation in two weeks’ time has excited the market with economists saying this would restore normal transactions and weed out parallel market price distortions.

The Central Bank said on Tuesday that new $5 and $2 notes as well as $2 coins will be introduced within the next two weeks. These will be at 1:1 in value with the bond notes presently in circulation. RBZ said it decided to maintain lower denominations to avoid triggering inflation.

Economist, Mr Kelleb Mloyi, said physical cash injection should tackle the two-tier pricing system that has been disadvantaging consumers who had no access to cash.

“It will increase money supply hence easing to a certain extent the liquidity crunch that has engulfed the economy for years now.

“The increase in money supply means less bank queues and an end to the two-tier price system if the cash in circulation is adequate,” he said.

Another economist, Mr Victor Bhoroma, said injecting more cash was good on the interim given the shortages of notes and called for tighter measures to guard against illicit cash deals and hoarding.

“The rationale for the introduction of the new notes and coins is purely to address cash shortages that has seen some businesses charging different prices for cash and electronic transactions.

Mrs Nontokozo Ncube said the RBZ must ensure the interbank market was fluid by channeling more foreign currency on the interbank market to benefit importing businesses.

Confederation of Zimbabwe Industries (CZI) past president, Mr Busisa Moyo, who is also the chief executive officer of Bulawayo-based United Refineries Limited also weighed in. — @okazunga