Depositors call Gono’s bluff over cash hoarding

Kuda Chikwanda



RESERVE Bank of Zimbabwe governor Gideon Gono’s threat that the introduction of a new currency was imminent had failed to improve bank deposits as c

ash barons continued to cling on to their holdings to trade on the parallel market.


The cash shortages were still prevalent by yesterday with banks saying they were not getting deposits from the market. The shortages are set to worsen after it emerged that $30 trillion is missing from official circulation. This means that 51% of total cash issued cannot be accounted for in the banking system.


This leaves only $28 trillion out of an initial $58 trillion in official circulation.


The latest figures beat last year’s record when 22% of the country’s bearer cheques disappeared from the system on the eve of Sunrise Part 1.


This year’s cash crisis comes after the central bank said it had injected $10 trillion into the market through the Basic Commodities Supply Side Intervention Facility meant to help revive businesses affected by a government-sponsored price blitz in July.


The RBZ is also sitting on $20 trillion of $500 000 bearer cheques which are yet to be issued. The central bank had also printed a new $1 million bearer cheque note which Governor Gideon Gono says will however not be introduced
because plans are at an advanced stage to launch a genuine new currency.


“Just under half of the cash we put into circulation is still in circulation. We believe that cash barons are holding the rest,” Gono said. He said the introduction of a new currency was imminent.


“Cash barons would be caught unawares. The cash that will not come back into the system will be shown in the RBZ’s books as profit,” Gono said.


“I will simply add it to my books as profit, so I cherish the prospect of catching them off-guard,” he said.


Gono however poured cold water on hopes that the central bank would intervene to solve the current cash shortages.


Instead he promised to launch Sunrise 2, saying the central bank was adopting stern measures targeting all those stashing large amounts of cash.


“As monetary authorities, we say no to this callous path, and hereby declare total war against the illegal dealers who are causing havoc in our markets. This time around, those who do not take heed will never recover financially, as a definite ultimate blow is being set on
them.”


While Gono said a new currency was imminent, market speculation was that he was bluffing.


Bank executives who spoke on condition of anonymity said they were convinced Gono was just trying to scare companies holding cash into banking it in the formal system.


“He did promise that it would be launched without prior warning. If he is convinced there are people breaking the law and holding onto cash, where is the wisdom in pre-empting the Sunrise strategy?” said one banker.

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