Zimbabwe bank prints cash to stave off 'panic'

The head of Zimbabwe’s central bank said on Thursday the country is printing money “at full capacity” in an urgent bid to alleviate chronic cash shortages gripping the southern African nation.

Leonard Tsumba, governor of the Reserve Bank of Zimbabwe, told a press conference that his bank is due to inject 24-billion Zimbabwe dollars (US$29-million) into the economy by mid-June.

But soaring inflation rates mean the problem is likely to persist, he said.

Shortages of bank notes are currently crippling operations in business and industry. Hundreds of people again queued on Thursday in central Harare in a bid to withdraw cash from banks. Banks have limited cash withdrawals, amid reports a black market has arisen for the local currency.

Tsumba said the situation was “abnormal”.

But he said that while measures were being taken to inject fresh cash into the economy, the problem was likely to remain given Zimbabwe’s soaring inflation rates.

Inflation in Zimbabwe is now 269% and rising.

“What we’re trying to do is guard against unnecessary panic,” Tsumba said.

He pleaded with people and businesses to bank their cash.
Many have been hoarding cash amid fears they will not be able to access it.

Cash shortages first surfaced after a mass stayaway last month and new protests are planned for next week.

“An economy that operates on cash alone is a retrogressive economy,” Tsumba said. He urged people to use cheques and credit cards more.

A new 1 000 Zimbabwe dollar note is to be introduced in November, the banking official said. - Sapa-AFP

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