The ManicaPost
Rumbidzayi Zinyuke Business Reporter
Zimbabwe’S money supply recorded an annual growth of 23,24 percent at the end of May mainly driven by a 29,85 percent increase in demand and savings deposits, latest figures from the Reserve Bank of Zimbabwe (RBZ) show.
The annual increase in broad money was, however, partially offset by declines of 14,28 percent and 0,07 percent in negotiable certificates of deposits and time deposits, respectively.
“Broad money” refers to the measure of money supply that includes physical money such as currency and coins, demand deposits at commercial banks and any other monies held in easily accessible accounts.
According to the central bank’s monthly economic review, month-on-month broad money supply grew by 1,37 percent, from $6,1 billion in April 2017 to US$6,2 billion.
“Broad money comprises transferable or transitory deposits, 71,04 percent; time deposits, 25,13 percent; bond notes and coins, 2,83 percent; and negotiable certificates of deposits, 0,99 percent,” noted the central bank.
In the period under review, there was an increase in year-on-year domestic credit of 21, 0 percent, from $6,9 billion last year to $8,4 billion.
The growth was largely attributed to a 38,67 percent annual expansion in net credit to Government.
“The surge in net credit to Government shows the fiscus’ heavy reliance on the banking sector, to finance its operations, on the back of subdued revenue collections.
“In addition, the growth in credit to Government also reflected banking sector holdings of Treasury bills, bought at a discount on the secondary market,” the RBZ noted in the report.
On a month-on-month basis, domestic credit grew by 3,33 percent owing to the expansion in net credit to Government.
Credit to the private sector recorded a modest growth of 1,99 percent, from $3,43 billion in May 2016 to $3,5 billion April 2017.
Private sector credit consisted of inventory build-up at 28,3 percent, consumer durables at 15,6 percent, fixed capital investment (14,3 percent) and pre- and post- shipment financing at 1,5 percent. The amount channelled towards other recurrent expenditures constituted 40,3 percent of the total outstanding loans and advances.
In the month of May, the total value of transactions processed through the National Payment System (NPS) increased by 21,2 percent from US$6,9 billion registered in the previous month to US$8,4 billion.
The central bank noted that the value of transactions processed through the RTGS systems were up at US$4,9 from US$4,2 billion in the previous month. RTGS transaction volumes increased by 46,2 percent remaining the most used method of payment in Zimbabwe.
Card-based transactions closed the month under review at $602,49 million, up from $506,14 million recorded in April this year.
