The RBZ governor has raised cash withdrawal limits by 100%, which is from ZWL$1000 to ZWL$2000 as of February 2021 although this figure appears to be very huge nominally and at face value, it does not bode well with market expectations.
Mobile money limits unchanged with transactions have been kept at $5000 per day and $35000 for the week, With the RBZ mulling on introduction of the higher denominations like the $50, the transacting public will continue to face cash shortages and incur higher transaction costs when they use other payment modes
The Governor announced that $50 notes will be injected into the economy
With the price and inflation gouging in the economy, consumers now require huge amounts of cash to enable them do transactions,
In a weekly publication Zimbabwe Coalition on Debt and Development ZIMCCOD lamented that the increase has not benefited the depositors.
‘’although the limit has been doubled, it will not extinguish the long queues in the banking halls as people now require a lot of money to do few transactions.’’ It reads
This cash withdrawal limit continues to disadvantage consumers as the market is charging premiums on other payment modes like Ecocash and swipe.
Additionally, the RBZ limits on Ecocash has also been a backlash on the consumers, the capped $5 000 per transaction limit prohibits bigger transactions.
As much as the RBZ is encouraging the consumers to use other payments methods like bank transfers for bigger transaction, the majority, especially rural farmers and rural folks who do not have bank accounts.
Indigenous companies representative Mr Esau Ndooro recommend some measure and considerations to RBZ which among the introducing higher denominations,
“It is therefore strongly recommended that the RBZ should introduce higher denominations to increase convenience to the transacting public.” he said
“Given the prevailing inflation trend and price increases, the introduction of higher denominations is unavoidable, though thorough consideration needs to be done in checking the possible money growth and inflationary pressures on the economy.’ He added
The contractionary measures aid economic stabilisation at the expense of increasing structural inequalities.
This also overshadowing growth in the unbanked and under- 5 capitalised informal sector 70% of productive Zimbabweans are thought to derive their livelihoods in the informal sector.
Increasing productivity and creating decent jobs in the informal and other sectors should be an explicit policy objective of both monetary and fiscal policy in Zimbabwe.
This is a missed opportunity within the context of lockdowns and pandemics to enhance the social security role of the informal sector by helping households and small business keep more of their money and access cheaper capital for production.