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Zimbabwe Central Bank Governor Says Cash Crisis to End This Week

  • Irwin  Chifera

Central Bank governor John Mangudya

Central Bank governor John Mangudya

The governor of the Reserve Bank of Zimbabwe, John Mangudya, says cash shortages are expected to end this week.

Mangudya was summoned by a parliamentary committee to clarify policy measures of easing cash shortages, increasing industrial capacity and curbing foreign currency leakages.

Mangudya told the parliamentary finance committee that the current cash shortages are expected to end after the central bank recently imported $15 million, which is expected to boost money supply.

Mangudya said contrary to widespread belief that the introduction of bond notes was meant to ease cash shortages, the move in intended to boost exports.

He said while the purpose of coins was to provide change, bond notes would be used to pay the five percent export incentive to boost production.

The facility is leveraged by a $200 million loan from the African Export and Import Bank.

But lawmakers told him that their constituents were confused about the introduction of the bond notes and wanted to know how they would work.

In response, Mangudya said there was a lot of misinformation on the bond notes.

He added that the introduction of the bond notes is intended to also curb externalization of money, which he said was rampant.

Acting committee chairman Terence Mukupe asked him what the central bank was doing to what he termed counter-revolutionary companies like Vice President Mphoko’s Choppies and Pick And Pay which he accused of externalizing the US dollar.

Mangudya said he was not brave enough to mention any names but said the central bank was aware of such companies and individuals doing that adding that the raft of measures he announced were intended to address the problems.

Mphoko was not immediately available for comment as he was said to be attending a scheduled meeting at the State House.

Former treasury chief economist, Masimba Manyanya, said while Mangudya’s measures were well-intended, Zimbabwe is facing more serious problems which Mangudya has not addressed in most of his policy measures.

Zimbabweans are facing serious cash problems as banks are limiting withdrawals to $50 per person a day. The International Monetary Fund says Zimbabwe’s economic crisis has been worsened by lack of clarity over the country’s black economic empowerment program and other issues.