Zimbabwean Banks Cut Withdrawal Limits As Currency Shortage Worsens

Zimbabwe’s currency shortage is old news. The country has been suffering from an acute shortage of cash that had prompted the government and the country’s Central Bank governor, John Mangudya, to suggest a new version of US dollars known commonly as bond notes earlier in the year.

The planned bond notes were supposed to have been backed by a $200 million support from the Africa Export-Import Bank. Zimbabwean’s had, however, buckled against the plan.

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They protested against the introduction of the bond notes, probably scarred by the Central Bank’s 2014 introduction of bond coins of one, five, 10 and 25 cents, pegged to the US dollar which failed in the long run.

Zimbabwe's currency shortage

Zimbabwe’s currency shortage is, however, not going away. In response to the worsened conditions, some Zimbabwean banks have slashed cash withdrawal limits to $50 per day and some other banks are failing to offer clients any of their money as the cash crisis worsens in the country.

Traditionally bigger and more liquid foreign-owned banks may be faring better but they are not left out of the currency shortage. They are reducing daily cash withdrawal limits from $300 to $200 while some indigenous banks are disbursing as little as $50 per day.

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To deal with the slashes, Zimbabweans have had to turn to supermarkets, some of which now operate a cash-back facility. The cash-back facility works by allowing an account holder swipe to buy some items and then the shopper is given some cash back in return. Some supermarkets are, however, not open to the option.

Business people are another group making the best of the situation. Those who receive cash every day are now offering cash to stranded clients for a fee. Some bank officials are taking advantage of the situation and accepting money from desperate clients to withdraw money that is over the limit.

Zimbabwe's currency shortage

As a result, of Zimbabwe’s currency shortage, banks are also suffering from dwindling deposits.

State-owned Chronicle newspaper also reports that long queues have formed at banks over the past seven days, with bankers saying the crisis is worsening every day.