November 22, 2019

Zim treasury promises more cash

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Ndaka Majaka

ZIMBABWE’S treasury plans to introduce bigger denominations into the market following the introduction of new $5 notes and $2 coins a fortnight ago.

The permanent secretary in the Finance ministry George Guvamatanga said they are aware that the recent injection of notes and coins did not address the country’s biting cash shortages.

“Larger denominations are on the way. We want to manage money supply. We are aware the money isn’t adequate and this will be addressed,” Guvamatanga said.

The revelations come as market watchers had queried the wisdom of introducing small denominations as the country battling inflation.

Guvamatanga also pointed out that with time, the low denomination coins will be withdrawn from the system.

The higher denominations to be introduced will be part of over ZWL1 billion expected to be drip-fed into the economy over the next six months.

Central bank data shows that Zimbabwe has about $19 billion in circulation, yet only 4,5 percent of this is cash.

The cash shortages have created arbitrage opportunities, driving a parallel market for cash.

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