In our latest surveys around town, we were relieved to note that the Ecocash cash-out rates have gone back to their old levels of 45-50% if you want notes and 30-35% if you want coins. This is not ideal given how this continues to erode people’s incomes but it is a familiar evil that people have gotten used to.
A week to remember
Last week the RBZ tried to intervene and restore some much-needed sanity into the cash-out and cash in the sector. Instead of doing the right thing (injecting more cash into the economy) they bungled the whole thing.
They tried to intervene by issuing a National Payment Service Directive (NPS 1 of 2019). This directive instructed mobile money operators ( basically Ecocash) to stop all cash-in and cash-out transactions. What followed were days of chaos and despondency as people were unable to access cash easily.
The cash-out rate rose to 100%
The few “agents” who could still process payments using merchant lines, ordinary accounts which still could receive money and swipe machines started charging 100% if someone wanted to cash-out. This means that if you wanted $50 you had to part with $100.
With the current regime of up to 50% if you want $50 you have to part with $75, your $50 which you get to take home and $25 which is the cash seller’s profit. Because Ecocash also charges an official commission you end parting with close to $80 in total.
The RBZ should hasten and print more cash but they won’t
The RBZ should exchange some of our RTGS balances and replace them with more cash but they probably won’t, that is because they are probably up to something. They are planning a new proper currency, this is all speculation but it is wise speculation.
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