While Zimbabwe certainly still has a biting foreign currency crisis one thing appears to have gotten less severe for some reason: The Cash crisis, which is still definitely a problem appears to have gotten less severe.
In June last year whenever I wanted to cash out money from my Ecocash wallet I had to part with “20%” on average. I have Ecocash agents seem to have a weak grasp on how percentages work. Often what they mean by 20% is that they will charge 20% on the amount that you actually Cash Out.
- For example, if you get to an agent and cash out $100 you will get $80
- In cases like this, they claim they are charging 20% when in actual fact they the cost would be 20/80 i.e. 25%
- Sometimes they get it right, especially if instead of asking them how much you get if you cash out a certain amount, you ask them how much you should cash out to get a certain amount.
Anyway the average Cash Out premium last year was 20% although it varied wildly during Mthuli Ncube’s early months. At one point the Cash Out rate was a steep 45% as people panicked.
The rate is now a manageable 5%
The Cash Out rate in a lot of the suburbs I frequent varies a lot. At the end/beginning of most months, the rate is high as there is high demand for cash. Where I stay they usually charge 10% for coins and 15% for notes during this period. The same rates are usually applied whenever civil servants get paid. Which makes sense as the government is the largest employer in this country thanks to an ailing economy.
During the off-peak days like right now on the 19th which is mid-month rates vary from 5%-8% if you want coins and 9%-12% if one is looking for notes. As my colleague has so ably pointed out notes have a higher value because they are easy to carry and count. They are especially a hit with money changers who shun coins.
While that might seem like a lot these rates are quite comparable to the rates we used to pay banks before the RBZ intervened at the beginning of the cash crisis. Also to reiterate what I have been saying, there is still a cash crisis out there with most people who want cash having to either pay a premium for it or spend their productive lives in queues.
Both choices are not ideal and should be solved in a functional economy. However, the black market rates have fallen to what one may argue are tolerable levels compared to the hell we were going through before. I look forward to the day when I don’t have to pay someone to give me back my money.
Ecocash has given up
Ecocash (the higher-ups) also seem to have given up the fight against the practice of agents charging a premium. It’s not like it is particularly hard to spot this. I mean why would one cash out $12.67?