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Zimbabwe Cash Crisis Eases But Local Currency Value Heads South


Shortages of cash which had hobbled Zimbabwe's economy for weeks were reported to ease late this week with fewer customers in line at banks to withdraw money, while the Zimbabwe dollar sharply declined against the U.S. dollar and other currencies.

Eyewitnesses said customer queues had disappeared from larger commercial banks in Harare though they remained at building societies or savings and loan institutions. In Bulawayo, the country's second largest city in the west of the country, and in Mutare on the Mozambican border, improvement was reported though queues remained.

Meanwhile, there appeared to be much more cash in circulation on parallel or informal currency markets, gauging by a large surge in the exchange rate for the U.S. dollar from around Z$2 million per greenback recently to more than $6 million. Scarcity of local currency since late 2007 had depressed the rate for hard currencies.

Some observers speculated that representatives of the central bank were purchasing foreign exchange in parallel markets to meet government requirements - for instance to purchase electricity, fuel, water purification chemicals, and other critical items.

Harare economist John Mufukare told reporter Jonga Kandemiiri that the cash crisis may have abated simply because many individuals took all their money out of the banking system recently after withdrawal limits were significantly raised.

More reports from VOA's Studio 7 for Zimbabwe...

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