Accessibility links

Breaking News

Zimbabwe Central Bank Governor Points Finger at Banks For Cash Crisis

Reserve Bank of Zimbabwe Governor Gideon Gono has blamed the country's banks for persistent shortages of cash, saying commercial institutions have failed to collect enough bank notes from the central bank to meet customer demand.

Gono earlier blamed the country's cash crisis on so-called "cash barons" who hoarded illicit earnings from parallel or black market transactions in goods and currency.

Most economists cite the hyperinflation that has ravaged Zimbabwe's economy to the extent that consumers must carry millions of dollars for ordinary transactions, while rents and school tuitions run into hundreds of millions of dollars.

Since last month Gono's institution has injected some $98 trillion into the banking system in new bank notes in denominations ranging from $250,000 to $10 million, but bank customers must still line up to withdraw money from their banks.

On Monday, Gono gave journalists, bankers and business leaders a tour of the vaults at the Reserve Bank, showing them big piles of cash he said banks had failed to pick up though it had been available. He also accused banks of tying up depositor funds in speculative activities including investments in the Zimbabwe Stock Exchange.

VOA was unable to obtain a response to Gono’s complaint from Chairman John Mangudya of the Bankers Association of Zimbabwe - a staff member said Mangudya was in a meeting and he did not return a call placed to his office.

But Zimbabwe National Chamber of Commerce President Marah Hativagone, who was among those given the central bank tour Monday, told reporter Jonga Kandemiiri that the central bank is ultimately to blame in the crisis because it has poorly planned.

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