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ATMs dispenses rands despite market hesitation

Business
BANK withdrawal limits continue to shrink amid reports that some financial institutions have started giving out the South African rand to ease serious cash shortages.

BANK withdrawal limits continue to shrink amid reports that some financial institutions have started giving out the South African rand to ease serious cash shortages.

BY TATIRA ZWINOIRA

As the cash shortages worsen, bank withdrawals dropped in recent weeks to as low as $20 from a usual average of between $100 and $200.

An FBC Bank client told NewsDay that the amount of cash being given varied depending on the branch.

Barclays Bank Zimbabwe head of corporate affairs and customer service, Emily Nemapare, told NewsDay they were operating within the multi-currency system, which has eight other acceptable currencies.

“In line with this, we are providing customers with the South African rand through our ATM channel, as well as in branch as per the Reserve Bank of Zimbabwe maximum cash withdrawal limits. This is aligned to efforts by the Reserve Bank of Zimbabwe to promote the use of multi-currencies through various initiatives that make it easy for customers to access the different currencies,” she said.

Customers withdrawing the rand are able to exceed the daily maximum withdrawals at banks dispensing the South African currency.

Foreign currency dealers said more people now sought to change the rand to the dollar.

But they said the demand was still lower than those seeking the currency to do business in South Africa.

A Steward Bank client, only identified as Marcus, said a branch in Bulawayo gave him rand notes, but he rejected them due to an “unfair rate”.

Steward Bank CEO, Lance Mambondiani said, despite the United States dollar shortage, they were still managing to assist clients, while also meeting the requirements of those who request the rand as an alternative.

“Steward Bank operates within the monetary policy framework regulated by the central bank, which, at the moment, requires us to deal in all currencies within the multi-currency basket,” he said.

Financial expert, Persistence Gwanyanya noted that banks were giving clients the rand, but a majority of them were still hesitant to accept the currency.

“I understand some banks are offering their customers the rand, but there is still a lot of hesitancy to accept it, ostensibly because it is less attractive on the market at the moment,” he said.

“This has partly contributed to the cash crisis that we face as a country. However, with the introduction of bond notes, we are likely to see increased demand for the rand, as some clients see them as a better option than bond notes because the rand is a real currency, which can transact beyond the borders of Zimbabwe.”

The financial expert said given a choice, some clients would prefer to withdraw the rand, rather than bond notes.

“We are currently seeing a situation where the market is warming up to the rand, as a number of banks are doing rand withdrawals. I am sure the major retail shops are accepting the rand and it would be better if a number of market players start accepting the rand so as to ease the demand for the US dollar,” Gwanyanya said.

“This will go a long way in alleviating cash shortages by reducing the inordinate demand for the US dollar currently characterising our economy.”

In a survey recently conducted by NewsDay, depositors have shown full support in using the South African currency, but insisted this should be at a favourable rate.