Confusion as RBZ orders banks to briefly stop operations

Tichaona Sibanda
18 December 2007

There was drama in Harare on Tuesday as thousands of people were left stranded outside banks after the Reserve Bank of Zimbabwe ordered financial institutions not to dispense cash or accept deposits.

Our correspondent Simon Muchemwa said: ‘Rumour quickly spread throughout the city that the RBZ was going to introduce new currency. People waited until early afternoon when banks started releasing cash, only to find out that there was no new currency but new notes of the old Z$200,000 bearer cheques.’

There has been anticipation since last week that the government was ready to let the RBZ introduce a new currency to counter the serious shortages of cash in the country.

Reserve Bank Governor Gideon Gono has blamed Robert Mugabe’s cronies for fuelling the country’s runaway inflation through illicit dealings. Gono last week Friday told delegates attending the Zanu-PF congress that some top government and ruling party officials were among the ‘cash barons’ blamed for the current cash shortages that have seen customers waiting long hours for scarce money.

Gono said the country’s inflation was running at 8 000%, although analysts believe it to be at least double this official figure. He also said the central bank released Z$67 trillion dollars, of which Z$65 trillion could not be accounted for.

Muchemwa told us that in 2003 the country experienced similar critical cash shortages that saw customers sleeping outside banks to withdraw their savings. But he said this year’s shortages were far worse than 4 years ago, with many banks now only dispensing Z$5 million per customer a day.

‘What we saw today (Tuesday) was a classic example of how a government has run short of ideas to revive the economy. The RBZ has opted to print more money than to introduce a new currency and the inflation will keep sky rocketing,’ Muchemwa said.