Zimbabwe’s banks face cash crunch

Some Zimbabwean banks are limiting cash amounts to individuals and companies.

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Harare - Some Zimbabwean banks are struggling to provide cash and are limiting amounts to individuals and companies, which the central bank blamed on the financial institutions underestimating demand and failing to improve cash distribution to branches.

Since Monday, customers from several banks have struggled to access money from automatic teller machines while daily withdrawals at banking halls have been limited to as low as $200.

Read: Zimbabwe's banks scramble to escape US fines

At three different banks in Harare on Wednesday, a Reuters witness saw customers being told to wait until there was enough money from deposits before being served. Several bank machines were also not dispensing cash.

“It is not a problem of the availability (of cash). Its more about distribution. Banks underestimated the demand for cash,” Reserve Bank of Zimbabwe governor John Mangudya told the privately-owned NewsDay newspaper.

Mangudya was unavailable for further comment.

Last month, Mangudya capped daily withdrawals at $10 000, saying amounts above that figure required central bank approval. He also said individuals and companies had illegally exported $1.8 billion in 2015.

Zimbabwe does not have its own currency, which it dumped in favour of the US dollar in 2009 after hyper-inflation reached 500 billion percent, at the height of an economic crisis.

Local banks have to import bank notes, mostly from the United States and South Africa because Zimbabweans mainly use the US dollar and rand currency. The sterling pound, euro and Chinese yuan are also legal tender.

REUTERS