Zimbabwe's central bank plans to target people hiding money in bank deposit boxes, homes, and businesses. The practice keeps millions of dollars out of circulation when the economy needs that cash for everyday transactions. Back in February, RBZ Governor Dr. John Mushayavanhu called this behavior "financial disintermediation" and warned it hurts economic growth by making money scarce for businesses and consumers.
He pointed out that many manufacturers sell products to informal markets but never deposit the money they earn. Instead, these companies keep large sums in cash deposit boxes, breaking rules set by the Anti-Money Laundering Act. Dr. Mushayavanhu promised the Financial Intelligence Unit would address this problem. FIU director-general Oliver Chiperesa recently confirmed they're preparing for action against these practices.
"We're creating regulations to make sure our enforcement stays within legal boundaries," Chiperesa explained. He noted that people typically use deposit boxes for important papers, not as personal money vaults. Banking your cash helps the entire financial system work better, making money flow more freely throughout the economy. Zimbabwe recently came off an international watchlist because officials improved how they track money moving through the system.
The FIU expanded its reach by opening Bulawayo offices to help protect the stability of ZiG, Zimbabwe's currency. Dr. Mushayavanhu stressed that keeping big piles of cash creates unnecessary risks for businesses and individuals. Banks offer better interest rates on savings accounts these days, making them a safer option than stashing money at home or work. More people have started using ZiG for everyday purchases, showing growing trust in the local currency.
Local currency deposits have jumped from less than 10 percent before ZiG to around 15 percent today. The central bank requires big companies to pay half their quarterly tax bills using ZiG as part of a strategy to strengthen the national currency. These measures aim to reduce cash hoarding and bring more money into the official banking system, where it can help businesses grow and create jobs.
He pointed out that many manufacturers sell products to informal markets but never deposit the money they earn. Instead, these companies keep large sums in cash deposit boxes, breaking rules set by the Anti-Money Laundering Act. Dr. Mushayavanhu promised the Financial Intelligence Unit would address this problem. FIU director-general Oliver Chiperesa recently confirmed they're preparing for action against these practices.
"We're creating regulations to make sure our enforcement stays within legal boundaries," Chiperesa explained. He noted that people typically use deposit boxes for important papers, not as personal money vaults. Banking your cash helps the entire financial system work better, making money flow more freely throughout the economy. Zimbabwe recently came off an international watchlist because officials improved how they track money moving through the system.
The FIU expanded its reach by opening Bulawayo offices to help protect the stability of ZiG, Zimbabwe's currency. Dr. Mushayavanhu stressed that keeping big piles of cash creates unnecessary risks for businesses and individuals. Banks offer better interest rates on savings accounts these days, making them a safer option than stashing money at home or work. More people have started using ZiG for everyday purchases, showing growing trust in the local currency.
Local currency deposits have jumped from less than 10 percent before ZiG to around 15 percent today. The central bank requires big companies to pay half their quarterly tax bills using ZiG as part of a strategy to strengthen the national currency. These measures aim to reduce cash hoarding and bring more money into the official banking system, where it can help businesses grow and create jobs.
