The Reserve Bank of Zimbabwe (RBZ) said Thursday about 1.1 billion Zimbabwe dollars in cash is currently in circulation in the country, far less than the 3.4 billion Zimbabwe dollars initially envisaged, resulting in persistent cash shortages in the economy.
Zimbabweans are still battling cash shortages despite re-introduction of the local currency in June last year.
Hopes were high that cash shortages, which have persisted for over five years, would be a thing of the past once the country has its own currency.
The bulk of the cash is being sold in the streets at premiums of up to 40 percent for bank notes.
The central bank has said it will drip feed cash into the market to avoid fueling inflation.
The RBZ’s Monetary Policy Committee (MPC) said Thursday the central bank had imported 400 million dollars in notes and coins in the last quarter of the year, but noted that the amount still remained far off the target that should be in circulation.
“This 1.1 billion Zimbabwe dollars of notes and coins in circulation, represents 3.2 percent of total banking sector deposits of 34.5 billion dollars as at Dec. 31, 2019,” the MPC said after its meeting on Wednesday.
“The MPC agreed that it should maintain its plan of getting the proportion of bank notes and coins in circulation up to 10 percent of deposits and that the Bank should consider the introduction of notes in larger denominations in line with inflation trends.”
The 5 dollar note is currently the biggest denomination in circulation and the government has promised to introduce higher denominations in the future. Enditem