Bank transactions decline

HARARE - Zimbabwe's financial transactions have declined significantly as the country slides into full deflation on the back of depressed aggregate demand, a recent report by the Reserve Bank of Zimbabwe (RBZ) indicates.

According to the central bank’s weekly economic highlights, in the first week of April, banking transactions processed through the Real Time Gross Settlement (RTGS) system declined from $1 billion to $887,4 million.

On the other hand, cheque transactions went down 12 percent to $1 921 883,05 from $2 195 554,20 in the previous week.

However, mobile transactions grew by 55,6 percent to $87 905 481,26 from $56 036 715,73 while Automated Teller machines (ATMs) transactions surged 46 percent from $50 791 023 to $73 918 394,44.

Point of Sale transactions also grew significantly by 47 percent from $31 888 207,63 to $46 959 250,25 in the period under review.

The central bank also noted that interest rates for all classes of deposits remained unchanged as the liquidity crunch continues to prevail in the money market.

“At commercial banks, the weighted lending rates for individuals have been on an increase since February 14, 2014, going up from 14,05 percent to 14,25 percent as at April 4, 2014.

“The weighted lending rates for corporate clients also increased to 9,29 percent, during the week under review,” said RBZ.

“The increase in the rates could partly be attributed to the cautious approach to lending by banks as the rate of non-performing loans continues to soar in the money market.”

At merchant banks, however, weighted lending rates remained unchanged at 18,88 percent and 17,73 percent for individual and corporate clients, respectively.

The latest central bank statistics comes at a time the southern African country’s economy is sinking deep into deflation.

Stats recently released by the Zimbabwe Statistics Agency (Zimstats) indicate that the country’s annual rate of inflation for March declined a further 0,42 percent to -0,91 percent, underscoring depressed aggregate demand in a poorly-performing economy.

Inflation rate for February 2014 stood at -0,49 percent, the first time that the country slipped into deflation after months of disinflation and adoption of multiple currencies in 2009.

“This means that prices as measured by the all items Consumer Price Index decreased by an average of 0,91 percentage points between March 2013 and March 2014,” Zimstats showed.

Monthly inflation rate for March slid into deflation, standing at -0,22 percent after dropping 0.27 percent on the February rate of 0,05 percent.

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