Reserve Bank of Zimbabwe Governor Dr Gideon Gono has broken his silence on the country’s cash shortage, assuring the nation that the central bank will remedy the situation before Christmas, the state-controlled Herald reported on Thursday.
Gono told the government mouthpiece that investigations by the central bank had shown that the cash crisis ”was the manifestation of a web that would soon be untangled”.
”A practical solution is on its way very soon and before the festive season. Let us not despair, for failure can never be a viable option for us as a people. The destiny of our future is squarely in our hands,” Gono reportedly said.
However, he neither gave details of the solution nor when he would launch the second phase of the currency reform programme ”Sunrise II” and details of its nature, the paper said.
”As the Reserve Bank has already given out to the public, there will definitely be Sunrise II coming any time from now, mainly to deal with the cash shortages as well as administering a decisive deterrent blow on the speculators.”
He said it was unfortunate that ”some senior members of the community” had been at the forefront of telling their runners on the streets to ignore and dismiss the notice on the imminence of Sunrise II.
”I want to also point out that as governor of the central bank, I am deeply sad that among those that are drilling the holes of instability in our economic systems are some who hold very respectable stations in our society, people to whom our upcoming children are supposed to be looking up for inspiration, guidance and protection from the chilly whims of today’s fast-paced global landscape, and yet their heads are buried deep in the shafts of economic destruction,” he said.
The central bank chief cited cash barons as the largest culprits in the cash crisis, saying the Reserve Bank had enough evidence to that effect.
According to Gono, as at November 15, cash in circulation stood at $58-trillion, but banks were holding an average market-wide float of $1-trillion, leaving $57-trillion ”floating somewhere out there”.
This meant that 98,3% of the total currency in issue was in people’s pockets or circulating outside formal channels, Gono said.
Cash barons dwelling in banks, under the guise of wholesalers and retailers, and other briefcase tycoons were wreaking havoc in the market through illegal dealings, he said.
The ”wait-and-see attitude” adopted by the central bank was meant to give ”a diplomatic tap on shoulders of those that are flirting with illicit parallel market trading and smuggling activities to realise that their ways cannot be allowed to sway the momentum of efforts meant to stabilise our economy”.
The Herald said that in recent weeks, some employees at a number of banks caught up in the cash web had been dismissed from work, reflecting the magnitude of banks’ involvement.
High levels of complicity, negligence and co-participation by banks in this instance had already been established and disciplinary measures on the banks’ shareholders, boards and management teams would soon be instituted, Gono said.
Overall — he said — a more holistic approach was required to deal decisively with the challenges confronting the economy. ‒ Sapa