NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, April 11, 2016

Zimbabwe banks have introduced a number of stringent measures targeted at limiting cash withdrawals.

Earlier in the month, banks capped withdrawals to $500. Automated teller machines (ATMs) were also switched off as Zimbabwe faces liquidity crisis resulting from excessive cash demand which has caused shortages.

In 2008 Zimbabwe was forced to replace its local currency in favour of the U.S. dollar as hyper-inflation reached 500 billion percent.

As of this week, banks pegged withdrawals to $200, despite Reserve Bank Governor John Mangudya informing a parliament committee just days before that the government had injected $145 million worth of cash into the financial system since January and that banks imported $118 million.