Maybe now is not the time to give up on spending hours in the bank queues waiting for cash you can get yourselves some US$ (United States Dollars). Some banks have been giving out US$10 and 30 bond notes The RBZ has been giving out allocations of US$ to the banks to give to individuals. This is in an effort to reduce the problem of the high rate OF US$ to transfer on the black market. The idea is to flood the market so the cash barons go out of business. Now I am not complaining, always happy to get some US$ but does that really address the issue.
Here’s the logic behind this according to RBZ Governor Dr John Mangudya
The Reserve Bank has injected more cash into the banking sector, therefore, those people who are selling cash at 100% would soon count their losses. If they are being encouraged by politicking, they are going to lose money. This week alone (last week) we have injected $25 million and next week (this week) we are putting $30 million, so this month we are saying we have increased it from $100 million to $150 million, therefore there is no logic for prices to go up when there is more money in the economy,
But something certainly changed his mind because just less than a month ago the same person also said…..
Even if we put a lot of money into ATMs (Automated Teller Machines), people will take the money and go and sell it, because the US dollar is being looked to as an investment as opposed to be a medium of exchange. So what makes people take money from the ATM is that they want to sell it 50 cents above its value . . . it has become an industry of selling money but we need to sell products. So there is now what we call an opportunity cost, should we put more money into ATMs for people to get money or should we put more money into the industry, which is employing people. It’s better to go for the latter
It seems the RBZ has reversed its decision not to issue out US$ to individuals
Will this help reduce the rate?
To some extent it will, because if you can wait in a queue for some US$ then maybe people will not want to pay so much for it and reports have been made of alarmed cash barons. I don’t think it will be that helpful though because the demand for the US$ is very high and people need it to keep their businesses going or do anything out of the country. Whatever money the RBZ has and whatever the RBZ gives us is just not enough.