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Cash Crisis Worsening in Zimbabwe

Some Zimbabweans waiting for cash outside a finance institution in the country. (Photo: Patricia Mudadigwa)

The cash crisis is worsening in Zimbabwe with long queues becoming the order of the day.

The situation has been worsened by some commercial banks which have decided to cut down automated teller machine withdrawals.

Economist Prosper Chitambara of the Labour and Economic Development Research Institute of Zimbabwe told VOA Studio 7 the cash crisis appears to have been fueled by panic withdrawals after the central bank announced recently that it is preparing to introduce bond notes that it said are expected to boost exports.

“The situation on the ground seems to be going from bad to worse. A number of banks have actually imposed withdrawal limits,” said Chitambara.

He added that the cash shortages are also affecting businesses that need to transfer money to other countries to pay for goods and services.

The economist further noted that this problem requires drastic measures to fix.

“The major problem is number one, lack of confidence that has affected deposits in the banking sector, and also we are also witnessing a mini banking crisis .... manifesting through what we call a bank run.”

Recently Reserve Bank of Zimbabwe governor John Mangudya told the parliamentary finance committee that cash shortages were expected to end after the central bank imported $15 million, which was expected to boost money supply.

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