I was surprised by the Reserve Bank of Zimbabwe's announcement of the increase in the weekly withdrawal limit from ZWL$5000 to ZWL$15000 on personal accounts. The announcement was made too late as the increase was not in tandem with the rise in the value of the United States dollar on the auction rate. There is no logical explanation or justification for the new withdrawal limit.
The RBZ had no
rational explanation for the low withdrawal rate in as much as it affects the
informal sector and the so-called unbankable rural citizens. The move by
the bank to increase the withdrawal limit on personal accounts without
increasing the monthly withdrawal limits ceiling is baffling.
The RBZ
deliberate move to increase the unbankable group of our citizens into poverty
as cash access to both the Zimbabwean dollar and the USA dollar will now be
available only through the black market. The move will in the long run
discourages saving and increase the informalization of our economy.
Informalization will in turn decrease the country's taxation base.
The RBZ should have tied the withdrawal limit to the USA dollar equivalent, for example using the poverty datum line, the weekly limit should be around USD125.00 which will add up to USD 500. This is at today's black market cash rate of ZWL137500 weekly and ZWL550 000 monthly. These two limits should be allowed to move in tandem with the RBZ weekly auction rate.
The RBZ move to keep the cash withdrawal limit at unrealistic low levels will cause the margin between the Black Market Rate and the RBZ auction rate to widen.
The Governor
explained that the withdrawal limit is in line with average wages earned is
an insult. The Governor must be made aware that the wages are inadequate and people are living below the poverty line. The majority of our citizens
both in formal and informal sectors have to hustle to cover the difference
between their wages and the poverty datum line to survive. The hustle to cover the gap needs cash.
The RBZ should revisit the cash withdrawal limits and increase them to realistic levels.
