The introduction of Statutory Instrument 142 of 2019 has resulted in an acute deficit of cash on the market. The SI reintroduced the Zimbabwe dollar at the same time banning the use of all foreign currencies for domestic transactions.
This is reported to have compelled cartels previously in the forex business to hoard bond notes and coins and resell them at exorbitant prices.
The Herald notes that the shortage of cash is worsening problems for the general public whose electronic money is being rejected in some shops. Public transport also demands cash only hence making life hard for travellers.
The publication suggests that the government come to the rescue of the citizens by making sure that cash is readily available at banks.
Alternatively, the publication suggests, the government could monitor and punish businesses that are rejecting electronic payment facilities so that the general public is not defrauded by ‘cash barons’. The Herald added:
Authorities should also investigate the sources of the bond notes and coins that are being sold on the parallel market when banks are not dispensing enough cash.
What the monetary authorities need to also ensure is that the cash in circulation is enough to cover transactions by the public, otherwise people will continue to be taken advantage of by the currency dealers.
This demand for cash payments only has seen some traders charging premiums for EcoCash and swipe transactions, as compared to payments in cash.
The publication further cautions that if left unattended, the cash crisis has the potential to reverse the gains of currency reforms.
More: The Herald
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Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were... Read More About Bond Notes