The Sunday Mail
Africa Moyo
RESERVE Bank of Zimbabwe Governor Dr John Mangudya says the recent spike in demand for cash in the country is “temporary” and will not spill into this week.
He, however, noted that the market has to adopt and adapt to plastic money to manage demand.
Last week, some banks battled to clear long queues prompting speculation that the market was plagued by cash shortages.
Dr Mangudya told The Sunday Mail Business that the heightened demand for cash had been caused by civil servants’ pay dates coinciding with those for the rest of the market.
“The civil servants were paid almost close to each other and close to the pay dates for the rest of the market, so demand for cash increased.
“As you are also aware, as Zimbabweans we don’t want to use plastic money but I think it is high time we use plastic money so that we don’t increase the demand for cash unnecessarily. We don’t print that cash, right; we need to move it from the USA and bank it in town then it circulates in the economy.
“So there are two things here: The closeness of civil service pay days and those for the rest of the market. Remember, February was a short month where everyone was paid this last week so what we are seeing is the tail-end of those queues.
“We don’t really expect those queues to continue this coming week (because) once people get their money — they get all of it — and they don’t come back (to the bank),” said Dr Mangudya.
Civil servants started getting their salaries around mid-February while the private sector salaries were paid from February 23.
There is reluctance by consumers to use plastic money such as cash cards, credit cards, debit cards, pre-paid cash cards and store cards.
Zimbabwe is predominantly a cash society.
“… as a central bank we are appealing to the public to use plastic money, the Point of Sale, their cards so that at least we don’t put pressure on the system.
“We want to ensure that we uphold the multi-currency system intact and demand for cash can be reduced when people use Point of Sale machines because when you go to the bank, the purpose of getting money is for buying, isn’t it?
“In short, its (demand for cash) a temporary phenomenon, we are aware of it and we are doing something about it and we also want the banking public to do something about it,” added Dr Mangudya.
