‘Premium on cash due to RTGS gridlock’

The increase in premium on cash is a result of a huge number of deposits being locked up in the real time gross settlement system (RTGS) in the central bank and banks.

Speaking to guests at the Confederation of Zimbabwe Industries Economic Outlook Symposium yesterday in Harare, economist and academic, Tony Hawkins said the real problem was money is not moving within the RTGS system, forcing companies to offer huge discounts for purchases using cash.

“Three examples of the cash premium that have come to my mind is, the first one, importing wine at a cash discount of 15%; Secondly, there was someone going to the optician not to buy anything, but just to have his eyes checked at a cash discount of 40%; Lastly, there was someone buying tiles for a kitchen in Msasa yesterday at 50%, a cash discount against the bank card,” he said.

This story is for NewsDay subscribers.