The Zimbabwe Gazette

Cash Crisis Reaches Alarming Levels
Friday, 23 November 2007

The current cash shortages have reached alarming levels in which a lot of banks cite they hardly have any money prompting a lot of people to wait for the whole day in long queues in anticipation of making withdrawals. By Lee ShunguThe Zimbabwe Gazette can reveal that most banks in and around the city of Harare have run out of cash. Banks have now resorted to cash limits not exceeding $10 million per day However, this comes when the central bank is reported to be poised to introduce $500 000 and $1 million notes early next month. Last week at Agribank (Westend) people queuing for cash were told by the bank manager to go home because the bank had no money. A lot of people preferred to remain behind in anticipation of some cash. A disgruntled farmer indicated he came all the way from Guruve and needed money for shopping and returning to his rural home. "If this means I should sleep here, then I will because I have no money right now," he said.{mosgoogle right} Zimbabwe's cash problems date back to 2003, in which many locals had to wake up as early as 4am to get a place in bank queues. The Reserve Bank of Zimbabwe (RBZ) governor, Gideon Gono has always resorted to printing more cash. Currently, if cash is available at any bank, the bank omits the Automated Teller Machines (ATMs), opting for clients to be served inside the bank. Jackie Hall, a manager at a local firm says she went to CABS with the aim of withdrawing $20 million, but was shocked to learn that individuals were only allowed to get a maximum of $5 million. "Imagine, I had to beg the bank teller and lie that I had an emergency to take care of," she fumed. "The teller started checking her desk drawers and took out some money. She said she only had $8 million to give me. I had no option but to take it," said Hall. Other banks which are most affected include Barclays, Stanbic, Standard Chartered, ZB and FBC. Only CFX and ZABG have not imposed cash limits mainly because their client base is low. Munyaradzi Khupe, a worker at an Engineering firm in Harare says it took him a week to get his salary from Barclays Bank. "Every time I visited the bank, I would be told cash was only available a couple of hours or minutes ago. I would return home empty handed." "When I had the chance to get the money, I withdrew all of it and now prefer keeping it at home," he said. Analysts say inflation coupled with ever-increasing costs of goods and commodities have worsened the situation, of which larger denominations of the currency will go a long way in alleviating the problem. Inflation recently surged to 14 840, 5 percent for the month of October, increasing by 6 848.5 percentage points on the September figure of 7 892, 5 percent.

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