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Will New Bank Notes End Zimbabwe's Serious Cash Shortages?

FILE:A street vendor poses with new bond notes in the capital Harare, Zimbabwe, November 28, 2016. REUTERS/Philimon Bulawayo - RTSTN0S

Zimbabweans are hoping to see more liquid cash in circulation following the release of new bank notes, Monday, by the country’s central bank.

The much-awaited local currency, in denominations of $2 notes and coins, and a $5 note, hit most of the country’s commercial banks, with the public expected to start accessing the notes Tuesday.

While hopeful that the newly-released notes will ease the country’s current cash crunch, Reserve Bank governor John Mandudya says that will only work if shop owners and businesses deposit money into commercial banks, rather than keeping it in their private homes.

Mangudya told VOA Zimbabwe Service that the bank plans to release about one billion notes over a period of about six months, with amounts varying according to need.

Banker Samson Nhliziyo adds that banks have received the money and are in the process of disbursing it to clients.

“Commercial banks have received the new currency, which was expected to be rolled out to the public. Banks have procedures to follow before the funds are available to the public, but the money is now there in the banks for the people tomorrow (Tuesday). There are $2 and $5 notes and a 2 dollar coins. This is what would be in circulation. These would be the Zimbabwe dollars.”

Nhliziyo says some people hope that the new currency would ease current cash shortages in Zimbabwe.

“There are high expectations for the new currency in Bulawayo especially for the elderly as they are looking at purchasing goods and services such as maize seeds, transport fares, purchasing of various goods which are half the price of those in the formal shops, and of course buying foreign currency … Organisations and individuals are looking forward to the new currency likewise. You may ask why the anticipation, it’s because of the lack of it in the market, especially in the banks.”

He says the new currency is expected to come in handy during the festive season.

“… The festive period will be much-interesting as people are expected to be travelling. There is high demand for goods and services like transport. Transport operators are not moving with the trends of having POS (point of sale) machines. Therefore members of the public need cash to pay for transport fares and related services.”

Critics view the printing of the new currency as a temporary measure instead of a long-lasting solution to the southern African nation’s cash crunch

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