Cash shortages which hit Zimbabwe in the last two months of 2007 have already continued into 2008 with winding queues being the order of the day in cities and towns around the country.

The injection of new bearer cheques and extending the $200 000 note lifespan seems not to be working at all.

As we enter the New Year on the 2nd of January, queues could be seen at almost all banks in the capital such as CABS, Kingdom, Beverly, ZB Bank, ZABG, CFX, CBZ, Barclays and Stanbic.

In the city centre, only Standard Chartered Bank had no cash queues.

Despite the recent introduction of new bearer cheques of $750 000, $500 000 and $250 000 many individuals are finding it difficult to access cash.

On Monday, the RBZ governor, Gideon Gono backtracked his plan to get the $200 000 notes out of circulation as he indicated the notes will remain legal tender until further notice. The notes were due to become valueless by the 31st of December 2007.

"It seems we have started the year on a bad note- by queuing for cash at the bank. We thought the introduction of new bearer cheques would help but to a larger extent, this seems not to be working," said Tonderai Pasipanodya whilst queuing for cash at Kingdom Bank.

"This clearly shows that the central bank governor did not effectively deal with the cash crisis which is likely to persist especially when we approach month-end as people would begin to expect their salaries," he said.

However, most banks are now permitting a maximum daily withdrawal of $50 million for individuals and $100 million for companies.

Morgan Tinarwo says he expected the cash queues to have eased by now.

"Taking into consideration the withdrawals made last year by individuals and some measures taken by monetary authorities, only a few people would currently be expected to come to the bank."

"People's accounts are also expected to have been exhausted," he said.

Market watchers indicate Gono pumped out very few new notes in the form of the $750 000 and $500 000 bearer cheques. The $250 000 note is also still very scarce.

"The cash problems are expected once again this year mainly because the cash is not available in circulation."

"Due to the escalating inflation, the consumer's purchasing power is constantly eroded and so applies to the value of each note,"

"As a result, in a short space of time, more notes would be required to purchase a certain product thereby creating more demand for cash," said an economist with a local bank.

Investigations reveal due to the high costs of printing money, the central bank used the $1000 note paper to print the new $750 000 note.

The economist adds Gono would have made the biggest mistake by eliminating the $200 000 note because the country is still in short of cash.

"Despite reports that new notes have not yet reached remote parts of the country, the $200 000 note is still critical as the RBZ has no cash to pump out," he said.

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