$1.9 billion cash injection for Zimbabwe economy – RBZ

RBZ governor Dr John Mangudya

The Reserve Bank of Zimbabwe (RBZ) will gradually inject nearly $1.9 billion cash into the economy over the next six months to boost liquidity, governor Dr John Mangudya has said.

He told Members of Parliament attending the 2020 National Budget seminar at Elephant Hills Resorts that the cash will entail new $2 bond coins as well as $2 and $5 notes of the Zimbabwe dollar; reintroduced in June this year after the country outlawed multi-currency regime adopted in 2009 after the collapse of the Zimbabwe dollar.

In terms of dealing with the cash situation, the RBZ intends to inject into circulation 10 percent of total money in circulation, as cash, in order to eliminate prevailing shortages and premiums hard pressed people are being charged for cash.

Dr Mangudya said the regional average of the total cash to deposit ratio was 12 percent, but countries such as Tanzania have up to 15 percent of their deposits in the form of cash.

Zimbabwe has about $19 billion in circulation, with only 4,5 percent being cash and half that amount being funds held in foreign currency accounts while the balance are RTGS or Zimbabwe dollars.