Zimbabwe’s central bank fails to fulfil promise to supply $1bn worth of new notes
But says new notes will start circulating from Tuesday
The Reserve Bank of Zimbabwe (RBZ) on Monday failed to supply $1bn worth of new notes that it had promised to pump into the market to ease the country’s cash shortages.
Zimbabweans had been looking forward to a rare opportunity to withdraw cash from banks. The country is facing acute shortages of cash, fuel, medicines and food. Banks’ automated teller machines (ATMs) have not disbursed cash for the past three years.
The southern African country is experiencing its worst economic crisis in a decade, with inflation at more than 300%, the second-highest in the world after Venezuela.
In June 2019, the government unexpectedly reintroduced the Zimbabwe dollar to end a decade of using the US dollar, which replaced the local currency that collapsed in 2009.
The central bank hopes the new notes will help end the cash shortage, bring down inflation and speed up the restoration of the long neglected domestic currency.
The cash crunch is so severe that notes are “sold” for a premium of as high as 60% in exchange with mobile money on the parallel market.
Depositors often queue for hours to access cash on the rare occasions when the notes are available at banks.
In October, the RBZ said it would release the new notes on November 11.
However, on Monday there was no sign of the cash at most banks visited by Business Day. Banks confirmed they had yet to receive new bills.
RBZ governor John Mangudya on Monday told journalists that while cash distributions had begun some delays meant banks would receive new bills only from Tuesday. All banks were expected to start to receive their allocations this week.
He said the $1bn of new notes would not be introduced at once, “but gradually on a drip-feed basis” over the next six months.
In Harare many people were disappointed after visiting banks in anticipation of making cash withdrawals.
“I have not withdrawn money from the bank since 2017 and I came into the city centre hoping to make a withdrawal but I found nothing at the bank. We are tired of buying cash from the black market,” said Tawanda Madonho, a Harare resident.