‘Don’t panic,’ RBZ says in bid to calm run on banks over currency fears

The Reserve Bank of Zimbabwe on Friday sought to calm a run on banks, insisting that depositors’ funds were safe.

Thousands of panicky Zimbabweans lined up in bank queues to withdraw their United States dollar balances, fearing a new banking and currency crisis.

“The RBZ wishes to advise and reassure the public that there is sufficient foreign exchange in the market to satisfy all needs and demands of banks’ customers,” governor John Mangudya said in a statement.

“The foreign exchange liquidity of banks stands at 60 percent in both cash and balances held with foreign corresponding banks.”

Panic was spread by messages circulated on social media, purportedly from BancABC and FBC bank setting new withdrawal limits from foreign currency accounts (Nostro) and also purportedly stopping transfers to credit cards if the money was not banked as cash, or did not come through a telegraphic transfer.

The measures would have particularly hit civil servants, whose salaries have a foreign currency component paid by the government.

The crisis came as the Zimbabwe dollar’s value tanked.

Said Mangudya: “Statements allegedly made by certain banks purporting that funds held in foreign currency accounts are not foreign exchange and that the said banks were deactivating international debit and credit cards such as MasterCard should be disregarded.”

Former finance minister Tendai Biti, now deputy leader of the opposition Citizens Coalition for Change, said: “In 2016, the regime introduced a fiat currency the Bond Note, after it had nearly exhausted genuine United States dollar balances held by banks through an expansionary fiscal policy.

“They have been at it again in the past 18 months, gnawing at genuine United States dollar balances. The system is now shacky once more.”

The official exchange rate showed the Zimbabwe dollar sliding to 3,673 to the United States dollar on Tuesday, with the parallel market rate reaching up to 7,000.

“Zimbabwe is now at that precipice where the exchange rate is now in the self-fulfilling freefall zone that we saw in 2008. Sadly, the regime doesn’t panic and they don’t care. The regime must accept failure. It must apologise to Zimbabwe and accept that the de-dollarisation experiment was a total disaster.”

Via Zimlive

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