Zim broad money supply declines

HARARE - Zimbabwe's broad money supply declined marginally from $4,34 billion in January to $4,33 in billion February this year, confirming the country’s economic slowdown, statistics from the central bank show.

The Reserve Bank of Zimbabwe (RBZ) in its monthly economic review released on Tuesday said on a year-on-year basis, broad money supply registered a 7,86 percent increase from $4,02 billion in February 2014.

The growth was, however, a slowdown of 3,75 percentage points from 11,61 percent recorded in January this year.

“Largely contributing to the annual growth in broad money supply were increases in long term deposits, of 32,28 percent and savings, 13,80 percent. Demand deposits, however, registered a decline of 0,21 percent over the same period,” said the central bank.

Despite this decline, demand deposits remained the dominant deposit category, 46 percent of total deposits.

“During the month under review, annual growth in credit to the domestic economy recorded an increase of 3,28 percent, from $4,1 billion in February 2014 to $4,24 billion. The growth partially reflects an increase of 28,76 percent in net claims on government,” read part of the report.

The increase in net claims on government, was driven by Treasury Bills worth $200 million issued in 2014, as part of assumption of RBZ debt by government. On a monthly basis, net credit to government increased by 0,95 percent, from $544,03 million in January to $549,18 million in February 2015.

The central bank noted that annual growth in credit to the private sector stood at 0,11 percent in February 2015, compared to 1,57 percent in January 2015.

On a month on month basis, credit to the private sector registered a marginal growth of 0,23 percent, from $3,6 billion in January to $3,63 billion in February 2015.

“Growth in credit to the private sector has remained low, owing to a slowdown in lending by banks which are grappling with high non-performing loans.

During the month under review, loans and advances constituted 81,44 percent of the total credit to the private sector, followed by mortgages advanced by building societies, 14,40 percent, other investments, 1,75 percent, bills discounted, 1,49 percent and bankers’ acceptances, 0,92 percent,” said the RBZ.

 

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