Harare — RESERVE Bank of Zimbabwe Governor Dr Gideon Gono yesterday said the current cash shortages being experienced in the market are largely a reflection of the seasonal increase in demand for cash.

Dr Gono told journalists and business leaders that the central bank had adopted a wait-and-see attitude with regard to the cash shortages.

"This is not to say we cannot do anything. We have pumped a lot of money into the market through various interventions, which is not supported by production albeit the inflationary pressures and we are waiting to see what happens," he said.

He, however, said the central bank would take necessary steps to ensure adequate cash availability during the festive season.

In the interim, Dr Gono said it was imperative that the banking sector plays a supportive role through the observance of standing cash withdrawal thresholds.

"Within this context, bulk cash handling companies must also plough the cash back into the formal system and desist from activities that foster financial dis-intermediation.

"There are reports that some bulk cash handlers are cashing in through the provision of cash at commission charges.

"Such practices run in breach of standing anti-money laundering guidelines and should be stopped," he said.

The unavailability of goods on the shelves has resulted in money being diverted onto the black market and the money was not finding its way back into the official system.

The country has been experiencing severe cash shortages during the past three weeks with long, winding queues being the order of the day in most banking halls and at automated teller machines.

Banks said last week that deposits had drastically fallen and they had been left with no choice but to reduce the limit on withdrawals to a maximum of $20 million for companies and $5 million for individuals.

They also said that big banks had been the worst hit by the shortages as compared to smaller banks.

Commercial banks have traditionally relied on huge cash deposits from retailers, but these had dried up owing to low stockholdings that have dampened sales.