Withdraw money in SA rand, urges RBZ
THE Reserve Bank of Zimbabwe and the Bankers Association of Zimbabwe have urged depositors to start withdrawing money from their banks in the South African rand as it is readily available compared to the United States dollar, to ease pressure on cash shortages.
The call comes amid worsening shortages of the dollar which has seen some banks limiting daily maximum withdrawals to just $50, while some have also banned other transactions such as transferring money from bank accounts to mobile money services.
The RBZ and BAZ have said most banks had large stocks of rand denominations hence depositors can demand their monies in the form of the South African currency instead of the dollar. The monetary organisations reminded the nation that Zimbabwe was still operating under a multi-currency system hence the need to embrace other currencies that are available in the country.
Responding to written questions from Sunday News, RBZ Governor Dr John Mangudya expressed hope that Zimbabweans would appreciate the situation and start withdrawing money in rand.
“The banks have the rand to give to their clients but the banking public prefers the United States dollars. We pray that the banking public understands that we are under the multi-currency system and as such we should also use other currencies that include the rand,” he said.
Apart from the use of the rand, Dr Mangudya said the central bank has also stepped efforts to convince banks to reduce bank charges especially on the use of plastic money to attract more people to cashless transactions.
“The country would need to embrace plastic money to avoid cash shortages. This is the practice in many countries. We are working closely with the banking sector to review charges on plastic money in order to make it more affordable. Indeed the Government is the biggest employer in Zimbabwe and therefore most of the cash imported is utilised in paying salaries. Queues always recur on paydays for the civil service. This could be mitigated by the use of plastic money or cards like what happens in some neighbouring countries,” said Dr Mangudya. He defended the limiting by banks of daily withdrawals noting that this was as a result of competing needs for foreign exchange.
“I must clarify that the coming in of the bond notes is not to deal with the shortage of cash. They are an export incentive bonus scheme to promote exports so that the country may have more foreign exchange to support the multi-currency system. In terms of the banks limiting withdrawals this is being done in order to ration the available cash in view of the competing needs for foreign exchange. The Reserve Bank and banks are reviewing the high bank charges in order to promote financial inclusion,” he said.
Dr Mangudya further called on businesses to bank their cash in line with the Bank Use Promotion Act to increase the circulation of cash in the economy. A team has been set up to force businesses to comply. Bankers Association of Zimbabwe advocacy officer Mr Clive Mphambela also confirmed that banks have stocks of rand and were ready to give out the money to depositors.
“We really need to diversify the different currencies in use in the country because there is now over concentration on the United States dollar, which is the reason why there are all those bank queues, people should simply accept other currencies like the South African rand. If the general public accepts the fact that the United States dollar is not the only currency in circulation in the country and accept the rand for example, I am sure we can get rid of these bank queues which have emerged in the past couple of weeks,” said Mr Mphambela.
he said while banks could agree to reduce the charges, the system could only work if more people embrace it.
“It should be accepted that anything that is under-utilised is usually expensive, which also goes to the use of plastic money. We have to reach a time where more people are using the system then we can reduce the charges because banks can now spread the various costs over a larger population.
“Our membership is also investing on point of sale machines which will enable depositors to pay for various services via these points without the need to access cash. I know for a fact that we have over 16 000 point of sale machines in the country, now we have to work at spreading these machines throughout the country,” said Mr Mphambela.
Meanwhile, the International Monetary Fund has said it will discuss with the Zimbabwe authorities on the issue of introducing the bond notes. RBZ announced that it has now postponed the introduction of bond notes to October.
In a statement on Friday, IMF deputy spokesman Communications Department Mr William Murray said the institution understood that Zimbabwe was introducing a number of measures to deal with the ongoing cash shortages.
“The shortages are mainly the result of weak external inflows and a decline in prices of commodity exports. More recently the situation has been aggravated by the drought afflicting Zimbabwe. The Government had to increase its food imports to mitigate the impact of crop failures on its people and the strengthening of the multi-currency system through the conversion of export earnings to euro and rand. We are currently assessing the implications of the measures on the economy, including the more recently announced issuance of bond notes; and we’ll engage in further discussions with the authorities with regard to their strategies. So, we’re going to have more discussions with the Zimbabweans on this strategy,” he said.