Come for more cash: RBZ

BANKS have to continuously draw cash from the central bank to ensure uninterrupted supply to depositors, Reserve Bank of Zimbabwe ( RBZ) Governor Dr John Mangudya has said.

New cash and coins — consisting of $2 notes and coins and $5 notes — were released to the market on November 12, with the first tranche of $30 million having been exhausted already.

Banks continue to be overwhelmed by expectant depositors, most of whom have to queue for hours on end to make withdrawals.

Currently, there are 100 000 account holders in Zimbabwe.

Withdrawal limits remain pegged at $300 per week for individuals.

Monetary authorities plan to release $1 billion in cash and coins over the next six months, which translates to an injection of more than $166 million per month.

“We will continue to disburse the money according to the needs of clients.

“It means if there is a shortage, the

banks should come to the Reserve Bank to get the money for their customers,” Dr Mangudya told The

Sunday Mail.

“The customers belong to banks, and not the RBZ. My customers are the banks. The customers who are lined up in the streets are bank customers . . . our job is to dispense money and put it on the market.

“The mechanics of the distribution of money are that individual banks come to the Reserve Bank to get money for their customers in exchange for the RTGS (electronic) balances.”

Financial institutions are swapping their RTGs balances to unlock cash from the apex bank, a process that is believed to be non-inflationary, as the stock of electronic money that is being replaced is already in circulation.

Central banks usually generate profit through seigniorage, which involves charging the difference between the face value of cash and coins and production costs.

Presently, commercial banks are buying cash from the RBZ “on a onefor-one basis”.