Zimpapers Logo

Michael Magoronga Midlands Correspondent
The coming in of new notes and coins, as announced by the Reserve Bank of Zimbabwe (RBZ) last week, is expected to increase the amount of cash in circulation and eliminate cash queues, economist and Monetary Policy Committee member Mr Eddie Cross has said.

This comes after RBZ Governor Dr John Mangudya said new $5 notes and $2 coins will be introduced in the next few days.
Mr Cross believes the measure by the RBZ is expected to significantly stabilise demand for physical cash and eliminate cash queues.

“The move increases the availability of cash in circulation and what it means is that there will be no bank queues because money will be readily available.

“The cash shortage gap is the one the RBZ is trying to squeeze so that one gets their money in cash at any time,” said Mr Cross.
Zimbabwe National Chamber of Commerce (ZNCC) vice president Dr Tinashe Manzungu believes the injection of new notes and coins into the market “is a stop-gap measure” aimed at easing the exchange rate.

“In the short-term, it would get rates into a better position. Indeed, it also curbs the cash barons as people would be going straight to the bank to access their money.

“This will bring a lot of relief to the consumers,” said Dr Manzungu.
Shortages of physical cash have resulted in long queues in banking halls as depositors battle to get bond notes and/or coins, which allows them to buy products at considerably lower prices compared to those charged for plastic money.

Some depositors have been losing up to 60 percent of their money to mobile money agents in a desperate bid to get cash, which is demanded by commuter omnibus operators and other retailers who trade exclusively in cash.

Economist and ZNCC chief executive Mr Chris Mugaga said it was critical for citizens to understand that the RBZ was not introducing a new currency, but new notes and coins to bolster the Zimbabwe dollar, which was reintroduced in June.
“There is a misnomer that the RBZ introduced a new currency; this is not a currency. We already have a currency. The move is to stimulate and improve cash availability. That should be corrected.

“Currently, we have less than 2 percent of total money supply in circulation. I do not see any serious impact the cash injection is going to have on the economy save for (the fact) that people will (be able to) access their money, (more easily)” said Mr Mugaga.