Zimbabwe Government Addressing Liquidity Crunch
May 3, 2016
Lloyd Gumbo and Brenda Ziga
Zimbabwe Herald
GOVERNMENT is working to address the liquidity crunch that has seen most banks reducing maximum withdrawals to about $200 per day while others have stopped loading money into Automated Teller Machines. As a result, some parents and guardians failed to access money yesterday for back-to-school shopping as schools open today. However, Vice President Emmerson Mnangagwa told workers who gathered at Rufaro Stadium for Workers’ Day commemorations yesterday that Government was concerned about the inconvenience that was caused by the liquidity crunch.
“The Ministry of Finance together with the Reserve Bank of Zimbabwe are currently seized with the matter and we are confident of a speedy resolution,” he said.
RBZ Governor Dr John Mangudya later told The Herald that they were treating the situation as a matter of urgency. “We are indeed working on something as the Vice President said, to flush out the queues,” said Dr Mangudya.
“The shortage is not in all banks. The shortages are confined to some banks. So, addressing the problem is an immediate issue. It needs immediate policy measures, so we are working on that to ensure we normalise the situation. We don’t want people to continue going through what they are going through.”
Dr Mangudya reiterated that it was important for Zimbabweans to use plastic money in their transactions to avoid inconveniences. Meanwhile, parents with children opening schools today were left stranded yesterday after failing to access cash from the ATMs and cash back from the ZimSwitch facility as the cash shortages continued to bite.
Some of the parents and guardians who spoke to The Herald expressed their disappointment over the challenges they faced. Mrs Prudence Murova said she failed to access school fees for her two children who are in boarding school.
“It is never easy for parents when children go back to school as we have to pay school fees, buy schools uniforms and other requirements such as groceries, but we are failing to access money from the ATMs and cash backs from ZimSwitch,” she said.
While some parents were able to buy some of the school requirements, they said paying school fees through Real Time Gross Settlement System (RTGS) was a challenge because of the costs involved.
“For example, when I transfer money that is above $500, I am charged about $75 which is very expensive. It is obviously important that authorities address the high rates that we incur from transferring money since we have this cash crunch at the moment,” said one of the guardians who identified herself as Mrs Mutevhe.
Some parents and guardians implored school authorities not to turn away children whose fees were yet to be settled. “School authorities must not turn away our children because they have not paid school fees because it is not our problem, but it is because of our country’s current financial situation,” said Mr Lawrence Murapiwa.
Zimbabweans generally prefer keeping hard cash even though there are some alternative payment systems such as point of sale and mobile platforms. It has also been observed that the country has low confidence in the banking system following the loss of savings after the transition to the multi-currency system following hyperinflation.
There have also been concerns about transaction charges on the various platforms such as POS, mobile money platforms and the high costs of maintaining bank accounts (which in turn results in short-term deposits).
Lloyd Gumbo and Brenda Ziga
Zimbabwe Herald
GOVERNMENT is working to address the liquidity crunch that has seen most banks reducing maximum withdrawals to about $200 per day while others have stopped loading money into Automated Teller Machines. As a result, some parents and guardians failed to access money yesterday for back-to-school shopping as schools open today. However, Vice President Emmerson Mnangagwa told workers who gathered at Rufaro Stadium for Workers’ Day commemorations yesterday that Government was concerned about the inconvenience that was caused by the liquidity crunch.
“The Ministry of Finance together with the Reserve Bank of Zimbabwe are currently seized with the matter and we are confident of a speedy resolution,” he said.
RBZ Governor Dr John Mangudya later told The Herald that they were treating the situation as a matter of urgency. “We are indeed working on something as the Vice President said, to flush out the queues,” said Dr Mangudya.
“The shortage is not in all banks. The shortages are confined to some banks. So, addressing the problem is an immediate issue. It needs immediate policy measures, so we are working on that to ensure we normalise the situation. We don’t want people to continue going through what they are going through.”
Dr Mangudya reiterated that it was important for Zimbabweans to use plastic money in their transactions to avoid inconveniences. Meanwhile, parents with children opening schools today were left stranded yesterday after failing to access cash from the ATMs and cash back from the ZimSwitch facility as the cash shortages continued to bite.
Some of the parents and guardians who spoke to The Herald expressed their disappointment over the challenges they faced. Mrs Prudence Murova said she failed to access school fees for her two children who are in boarding school.
“It is never easy for parents when children go back to school as we have to pay school fees, buy schools uniforms and other requirements such as groceries, but we are failing to access money from the ATMs and cash backs from ZimSwitch,” she said.
While some parents were able to buy some of the school requirements, they said paying school fees through Real Time Gross Settlement System (RTGS) was a challenge because of the costs involved.
“For example, when I transfer money that is above $500, I am charged about $75 which is very expensive. It is obviously important that authorities address the high rates that we incur from transferring money since we have this cash crunch at the moment,” said one of the guardians who identified herself as Mrs Mutevhe.
Some parents and guardians implored school authorities not to turn away children whose fees were yet to be settled. “School authorities must not turn away our children because they have not paid school fees because it is not our problem, but it is because of our country’s current financial situation,” said Mr Lawrence Murapiwa.
Zimbabweans generally prefer keeping hard cash even though there are some alternative payment systems such as point of sale and mobile platforms. It has also been observed that the country has low confidence in the banking system following the loss of savings after the transition to the multi-currency system following hyperinflation.
There have also been concerns about transaction charges on the various platforms such as POS, mobile money platforms and the high costs of maintaining bank accounts (which in turn results in short-term deposits).
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