Cash Crisis Worsens in Zimbabwe as Banks Run out of U.S Dollars

The cash crisis in Zimbabwe has worsened with most banks now restricting daily individual withdrawals to $20 and at least $500 for companies.

Several bankers told VOA Studio 7 that some banks like the state-controlled ZB bank was the hardest-hit as most of its clients can’t access cash.

One of the bankers, Samson Nhliziyo, said the situation is being worsened by the central bank’s proposals to introduce bond notes next month designed to boost exports and subsequently revitalize the dollarized money market.

“Indications are that the situation is critical in most banks … ZB is one of the most affected as clients are failing to get even $20 a day. We are slowly going back to the financial crisis that gripped the country when we were using the Zimbabwe dollar,” said Nhliziyo.

The Bankers Association of Zimbabwe has of late been quoted by some media entities in the country expressing concern over the slumping money market.

The Reserve Bank of Zimbabwe, which introduced bond coins in 2014 to facilitate the availability of change, says the bond notes are backed by a $200 million financial injection from the African Export-Import Bank.

Citizens, however, fear that the bond notes are an attempt by the government to reintroduce the now defunct Zimbabwe dollar, which was dumped following historic inflationary rates that crippled the local economy.

Some Zimbabwean organizations continue staging protests against the introduction of the bond notes saying the move would devastate the economy.