The cost of cash
In order to pay household bills and buy groceries, it often means using cash as the system of processing cheques cannot keep up with the pace on inflation.
However, each individual is limited to drawing $500 000 a day and this has been in place since last year. Companies, no matter whether they employ 2 people of 2 000 are limited to double that amount. Since this regulation was introduced inflation has divided the real value of this money by about 9 times and therefore it makes life very difficult for ordinary people.
Because cash is so short now, it has had the effect of even reducing the cost of foreign currency in the black market where we all invest our Zimbabwe dollars in forex rather than keep it in the bank where it loses its real value at about 1.5% per day.
Therefore, you will now hear that we are expected to pay a fee for cash and those that can get their hands on such money “on sell” it as a commodity for a percentage fee. I learnt the other day that large volumes of cash are available but one has to pay what effectively is a bribe of 6% at the local bank and there is another 10% for someone in the Reserve Bank. Because of this desperate shortage, ironically, if you pay your bills in cash you obtain your service or product at one price or you now pay extra if you use a cheque or electronic Banking. This is even stated on quotations.
Inflation this month is 8600% annualized (it will, be more now) and we must assume that the amount of money in circulation has to grow at this rate to keep up with demand. The government is throttling the system and it is becoming unsustainable.
May 2nd, 2007 20:43
can americans mail cornmeal to zimbabwe?
May 4th, 2007 12:05
Hi,
I read that with effect of April 16th the cash withdrawal limit for individuals has been raised to 1,500,000 and to 3,000,000 for corporations? Not that that would help us much…but anyway.