Business

Zimbabwe gov’t spends Millions to clean dolar bills

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Staff writer

newsdesk@greatlakesvoice.com

Financial institutions in Zimbabwe are each spending more than US$11 million a month repatriating soiled notes to their countries of origin, the country’s bankers’ association estimates.

This, the Bankers Association of Zimbabwe (BAZ) claims, forces banks to push up cost of funding and bank charges in a bid to recoup costs.



“We have to get the soiled money back to the United States or South Africa. We are charged 1,25 percent of the amount repatriated,” BAZ president, George Guvamatanga told the media.

The country, has since 2009, adopted a cocktail of currencies, mainly the US dollar and the South African rand, after it ditched its own, which had all but become valueless. It is estimated that since February 2009, US$478.8 million has been spent on repatriating soiled notes.

Zimbabwe has no formal arrangement with either the United States or South Africa to use their currency; this means the country has to bear the costs of repatriating the old notes to their respective countries for replacement.

Guvamatanga says the cost of repatriating foreign currencies contributed a significant portion to the cost of money and bank services.

Banks in the southern African nation are accused of ripping off their depositors by charging inflated interest rates ranging between 15% and 25%, and imposing exorbitant bank charges of up US$2.50 per transaction, which has seen them making massive profits, yet the rest of the economy staggers.

Figures show that commercial banks, merchant banks and building societies earned close to US$192m in interest on loan advances and leases and more than US$118m from other charges.

Each banking institution earned between US$1 million and US$16 million in bank charges between January and June 30.

On interest income from loans, advances and leases, the banks have each earned between US$1 million and US$61 million.

 

This post has already been read 1536 times!

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