Zimbabwe this week laboured through the country’s return to substantive bank notes after the country abandoned the Zimdollar in 2009, with depositors happy to access cash at no extra costs but analysts and business operators saying it was still early to determine the impact of the new units.
The Reserve Bank of Zimbabwe released $30 million into the formal banking sector on Tuesday, allowing banks to resume withdrawals in most parts of the country.
Standard Bank’s unit in Zimbabwe, Stanbic dished out a maximum of $100 (equivalent to about R100 on the streets of Harare) for the day with depositors waiting for up to an hour only one cash machine was functional.
Others such as Steward Bank – a spin off from mobile firm Econet Wireless- and at CABS that is run by Old Mutual also managed to transact.
The new notes have however drawn criticism from analysts and the opposition who believe Zimbabwe should have reverted to the US Dollar until there was sufficient productive capacity.
Oxlink Capital chief executive officer and economist Brains Muchemwa said President Emmerson Mnangagwa’s administration initially targeted a 10 percent year-on-year inflation by the end of this year while the government foreign exchange rate “has been 1:6 while the rate is now around 1:20” on the streets.
“Government original 2019 target expenditure was $7.7bn. Now revised to $18.6bn,” he added.
However, for economic analyst Admire Mandangu, “there is nothing to panic about” regarding the introduction of the new notes.
“The newly injected new notes work at par with the bond notes. There is no money being phased out neither do we have EcoCash (mobile money) or bank transfers being outlawed.” But the rush for withdrawals stalled when branches such as CBZ Kwame Nkrumah branch ran out of the notes.
“For today they have stopped but earlier on they were giving $100. Maybe tomorrow they will resume,” said a security guard manning the branch’s ATMs.
Some cash machines were also frequently breaking down while most shops in the CBD said shoppers were yet to purchase goods using the new notes. Others however said this was not surprising as people tend to use mobile money and Point of Sale machines when purchasing from formal shops.
State media quoted central bank chief, John Mangudya saying : “We also need to ensure that shops that receive cash bank it in line with the Bank Use Promotion Act. Big outlets will be monitored.”- Business Report