Let’s be honest cash shortages are no longer as acute as they were a month and a half ago. However, they still exist as the bond and RTGS are still very far away from being at par. For example, $1 USD equals $23.20 RTGS at the moment but only $16.60 bond. Prices follow these pattern too with products cheaper in bond.
This is all despite the fact that according to the RBZ, they have poured $110 bond notes and coins presumably since last month.
Under the MPC we have tackled the issue of cash by now we have injected up to $110 million cash in the economy which I think will help in terms of reducing queues.
I want to stress that we have not increased the amount of money supply. We increased the ratio of cash to electronic money, that is what we have changed.Deputy Governor Khuphukile Mlambo
Here is why we still have cash shortages
Frankly, because a $110 million Zimbabwean dollars is practically nothing. That is just over $4 million USD at today’s black market rates which are used by companies to set prices. The RBZ is calling this drip-feeding in order to avoid inflation but this is just a sad failure on their part period.
Look at the current 2020 budget for guidance the budget is for over $60 billion dollars what percentage is $110 million of that? Look at prices in shops. It’s therefore not surprising that despite initial movements in the cash out premium on the black market nothing has changed since. Currently, the cash-out rate stands at 30% for notes and 20% for coins in most parts of Harare.
As we move towards the holiday season more cash is needed. This means an increase in premiums as at the current rate the RBZ’s drip will miserably fail to match demand.
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