Zimbabwe’s New Money

The effectiveness of the fresh liquidity injection will be tested this weekend when the country will be without its dominant mobile money platform, EcoCash. Demand for cash has been elevated in Zimbabwe despite the over reliance on mobile money, most likely because money supply is low. The Monetary Policy Committee of the Zimbabwean central bank admits that the country’s “broad money supply of 4% is low compared to regional and international levels of 10% to 15%”. The impact of the cash crisis has been best captured by consumers being forced to pay premiums of up to 50% to get their cash from mobile money agents as well as a run-away Zimdollar vs US Dollar parallel market exchange rate currently at 1:20 against 1:15 on the official interbank market. 


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