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Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya on Thursday unveiled his 2021 monetary policy statement that brings relief to the transacting public while making positive economic projections for the year.

For some time bank account holders were only permitted to withdraw $1 000 in cash weekly. He doubled the maximum withdrawal limit which will mean that people who need physical cash in hand can have it.

He announced that the central bank will soon introduce higher denomination notes – the $50 note specifically – to ease the challenges that some have been facing counting lots of notes when paying for goods and services.

He projected that annual inflation will close the year at around 10 percent adding that the economy is likely to recover from the adverse impact of Covid-19 and post a growth of 7,4 percent this year.

Keeping a tight lid on illegal foreign currency trading which almost forced the economy to its knees over the years, the RBZ maintained the cap on electronic transactions at $5000 daily and $35 000 weekly. “The measures presented in this statement are expected to support the attainment of the envisaged economic growth of 7, 4 percent in 2021 and to control inflation to below 10 percent by end of December 2021,” said Dr Mangudya.

“This inflation path will be underpinned by a targeted month-on-month inflation rate of below three percent.”
As such, the Governor said the bank’s focus on fostering price and financial system stability in the economy requires team effort, as he called on all Zimbabweans to enhance self-discipline and compliance while cherishing economic progress.

“Thus, sustaining the current economic stability that was brought about by the conservative monetary targeting framework, the auction system, fiscal discipline and efficacy in the mobile banking system is paramount and needs to be preserved, safeguarded and sustained,” he said.

We are happy that the central bank continues with its measured approach to defending the currency and keeping the economy healthy.

Doubling the cash withdrawal limit will ensure that the transacting public have more cash in hand to pay for a ride on Zupco, to buy vegetables at the market or sweets for their children instead of having to swipe or use EcoCash for these small items. That is important.

However, keeping the maximum cash withdrawal limit at $2 000 will not allow cash barons, those Shylocks of our time, from amassing much cash to begin to sell to us at a premium. They will have nowhere to get that kind of cash. That is good.

We urge Dr Mangudya to continue on that path – getting those who really need cash to have it for legitimate use while ensuring that those who want to sell it have no access to it.

On this score, we urge our people to continue developing an interest in using plastic and electronic money.

The $50 dollar note will soon become the biggest note in circulation, taking the place of the $20 note. We hope the larger note will be in circulation soon so that those among us who need to have cash in hand can carry smaller parcels of $50 notes. We are particularly happy that the RBZ chief kept an eye on the illegal foreign currency market.

Yes, the weekly auctions are there to provide foreign currency to firms that need it and it is growing but for the platform to gain more strength illegal money changers must not have access to huge electronic balances to move around, destabilising not only the national currency but also the economy at large. The $5 000 daily and $35 000 weekly limits must remain.

The growth that Dr Mangudya foresees is possible given that we are set for one of our biggest national agricultural harvests in years amid the bountiful rains and impressive preparations led by the Government under the Pfumvudza/Intwasa scheme and others. We pray that the rains continue in a way that doesn’t not disrupt the good crop that we have.

Covid-19 has been disruptive, we acknowledge, but the measures that the Government has put in place, the promising farming season and the discipline and unity that authorities are enforcing will get us sailing evenly this year.