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Unwelcome bond coins intensify Zim cash crunch

Oct 24 2016 12:07
Memory Mataranyika

Harare - Outside a Standard Chartered Bank branch in central Harare, the queue stretches for a few metres back and there are about 35 people awaiting their turn to withdraw cash from the ATM, but inside there are only about 10 people withdrawing money from the counters.

The number of people lining up for cash at foreign banks in Zimbabwe such as units owned by Standard Bank, Nedbank, Barclays and Ecobank are better compared to cash queues at the locally-owned banks.

Inside the Standard Chartered Branch, the bank tellers are smartly dressed and smile at those withdrawing money. But depositors' smiles quickly turn into frowns the moment the teller says: “Today we have coins.”

The cash crisis in Zimbabwe has just gone up a notch. Banks have started giving out bond coins to depositors withdrawing cash, while withdrawing limits are either $50 or $100 per day.

“That’s what we have today; we are just getting along,” says the bank teller at the next counter, as she tries to calm a male depositor in his mid-thirties.

In the bank queues, talk is mostly about the impending introduction of bond notes that has been delayed amid reports over the past week that a company in Germany has refused to print the Zimbabwean currency.

But banks are stretched and managers in the financial services sector in Zimbabwe say month-ends are posing headaches for them. Opinion is divided among executives in the banking sector, but in public they all support the bond notes.

“You can see what is already happening with the current situation and it is going to be worse when the panic sets in, effectively when dates are announced for the bond notes,” said one senior bank manager.

Other business executives have already said the current cash crisis is resulting in delays in outbound remittances. Delta Corporation, the Zimbabwean unit of SABMiller, has had to delay two new plants owing to delayed payments to international suppliers.

But while the worries for companies and businesses are in effecting payments and settling other transactions quickly, there is another headache for general depositors; they now need to make provision for bond coins of as much as $50 that banks have started to issue out.

“If this is the situation, the ATMs will soon stop giving out cash and we will be forced to accept the bond coins and the bond notes. But we don’t want them because it’s just not money,” said another depositor.

zimbabwe  |  bond notes  |  africa economy  |  currencies
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