Reserve Bank sets cash withdrawal limits

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THE Reserve Bank of Zimbabwe (RBZ) Wednesday announced cash export and withdrawal limits with immediate effect in order to stabilise and stimulate the economy in efforts to end the current cash crisis that has hit the country.
RBZ governor John Mangudya conceded during a press conference the dysfunctionality of the multi-currency regime as a result of the strong United States Dollar (USD).
He said it had become more of a commodity, a safe haven currency or an asset than a medium of exchange.
Mangudya said the shortage of the USD cash in the country as evidenced by queues at some banks and automated teller machines (ATMs) could be attributed to a number of factors.
He said the central bank would with immediate effect, put measures to improve the situation.
“Cash withdrawal limits in the bank will be USD1000, Euro 1000 and 20 000 Rand.
“ATM withdrawals will be equivalent to bank withdrawals and maximum cash allowed to be taken outside the country has been revised downwards from $5000 to $1000, Euro 1000 and 20 000 Rand,” said Mangudya.
In addition, the RBZ chief said 40 percent of all new USD foreign exchange receipts from export of goods and services, including tobacco and gold sale proceeds, shall be converted by RBZ at the official exchange rate to rands and 10 percent to Euros.
The policy measure is designed to ensure the demand for cash amongst a wide range of currencies and to mitigate against concentration risk.
The bank also established a USD200 million foreign exchange and export incentive facility which is supported by the African Export-Import Bank (Afreximbank) to cushion on the high demand for foreign exchange and to provide an incentive facility of 5 percent on all foreign exchange receipts, including tobacco and gold sale proceeds.
In future, the governor said, the country would introduce bond notes of $2, $5, $10 and $20 denominations as an extension of the current family of bond coins for ease of portability in view of the size of the USD200 million backed facility.
The RBZ and the business council represented by Confederation of Zimbabwe industry (CZI), Zimbabwe National Chamber of Commerce (ZNCC) and Bankers Association of Zimbabwe (BAZ) have come up with a foreign exchange priority list to guide banks in the distribution of foreign currency towards competing demands.Advertisement

The priorities are in high, medium, low and the last category is ‘not priority’ as this stance will ensure available foreign exchange resources are efficiently appropriated towards those sectors in the economy with capacity to generate liquidity to fund the economy’s foreign payments.
Zimbabwe has been experiencing a cash crisis for almost a month and queues have been the order of the day.