THE Bank has imported additional banknotes and coins to resolve cash shortages, the Reserve Bank of Zimbabwe has said.
Presenting, the 2020 Monetary policy this Monday, Dr. Mangudya said the central bank is aware of the challenges being faced by the public in accessing cash, as such they are working on increasing availability of cash for transactional activities.
“Following the Monetary Policy Committee (MPC) decision in October 2019 to increase the quantity of banknotes and coins in circulation to try and reduce the inconvenience being faced by the public in accessing their cash at banks, the Banks has imported additional banknotes and coins to ameliorate this challenge,” he said.
An additional amount of ZW $150 million was disbursed in the last quarter of 2019 to give a total of ZW$1.1billion worth of notes and coins in circulation in the country as at 31 December 2019.
“This ZW$1.1 billion represents 3.2% of total banking sector deposits of ZW$34.5billion as at 31 December 2019. As per normal banking practice, the notes and coins were sold at local banks for distribution to clients in exchange for RTGS balances, to neutralise any expansion of money supply and therefore, inflation. Accordingly, the cash injections to date have not increased money supply and thus managing inflationary pressures, said Dr. Mangudya.
He also said the Bank will continue to inject more cash but sticking within the confines of the required optimal proportion of up to 10percent of deposits as agreed by the MPC.
“The Bank will continue to gradually increase the notes and coins to the desired optimal proportion of banknotes and coins in circulation of up to 10 percent of deposits agreed by the MPC to meet the cash demand. Moreover, the bank will gradually introduce notes in larger denominations to improve efficiency and convenience to the public,” he added.