Harare – Standard Chartered Bank, one of Zimbabwe's most trusted commercial banks, told its customers this week that even though their local account may be rich with a US dollars balance, they cannot use that money on their Visa cards outside Zimbabwe.
Many better off Zimbabweans, especially those holidaying or shopping in South Africa, fund their trips and purchases with credit or cash cards from Standard Chartered or other foreign-owned banks.
Now, even Stanchart says it cannot afford to allow these withdrawals as Zimbabwe does not have enough US dollars in its foreign or ‘nostro' account to fund withdrawals outside the country. It also strictly limits customers’ withdrawals in Zimbabwe.
“We regret to advise that we have cancelled the automatic use of your Visa debit card outside Zimbabwe with immediate effect,” Standard Chartered said. However, clients, who wish to use their cards outside Zimbabwe, may still apply for special consideration prior to travel.”
With imports treble the size of exports, Zimbabwe is critically short of foreign cash and US dollars is the main money used since the local currency was abandoned after the government printed ever higher denomination of the Zimbabwe dollar until it became worthless.
Late last year the central bank launched low denominations of a new Zimbabwe currency known as Bond Notes, but they only have value in Zimbabwe and supply of them is also limited. Zimbabwe says the notes are backed by a loan from the Afreximbank in Cairo. The Reserve Bank of Zimbabwe will not say where the new notes are printed.
Most service stations in Zimbabwe insist that fuel be paid for at least half in US dollar cash notes and only half by local plastic debit cards and a black market between US dollar cash, Zimbabwe Bond notes and plastic is spreading into many sectors of the economy. So some traders in Harare said this week they will hike prices by between 15 – 30 percent for Bond Notes or plastic.
Local industries say they struggle to pay for imports, mostly from South Africa, as Zimbabwe takes about 120 days to settle most accounts for imported goods says the Confederation of Zimbabwe Industries.