Inflation pressures mount

HARARE - Zimbabwe's inflation pressures continue escalating as the country’s annual broad money supply (M3) rose by 40,8 percent to $9,1 billion in June 2018 from $6,4 billion recorded in same period last year.

Broad money supply is money in circulation — physical currency and demand deposits.

According to the Reserve Bank of Zimbabwe (RBZ)’s monthly economic review for June, the M3 rise reflects yearly increases in transferable deposits of 93,31 percent and negotiable certificates of deposits (NCDs) 1,79 percent.

Time deposits, however, declined by 5,18 percent.

“Bond notes and coins circulating outside the banking system increased from $175,8 million in June 2017, to $379,2 million in June 2018.

“Month-on-month, broad money increased by 6,84 percent from $8,5 billion in May 2018 to $9,1 billion in June 2018,” said RBZ.

Broad money was made up of transferable deposits, 79,16 percent; time deposits, 15,96 percent; currency in circulation, 4,15 percent; and negotiable certificates of deposits, 0,73 percent, during the month under analysis.

Credit to the private sector recorded an annual growth of 11,42 percent in June this year, compared to an annual growth of 8,40 percent the previous month.

On a monthly basis, credit to the private sector increased by 2,90 percent from $3,8 billion in May 2018 to $3,9 billion in June.

“Households accounted for 23,3 percent of total domestic credit on a sectoral basis, followed by agriculture, 17,33 percent; distribution, 13,69 percent; financial organisations and investments, 12,74 percent; services, 11,97 percent; manufacturing, 11,31 percent; mining, 4,16 percent; construction, 2,44 percent and transport and communications, 1,89 percent,” the central bank said.

Zimbabwe adopted a multicurrency regime with the US dollar as the base currency after abandoning its own in February 2009.

— The Financial Gazette

Comments (1)

So long as two mabondi notes equal one USD inflation is on its way upward. I did not need to go to Harvard to know that. Please tell Comrade Doctor John "Bond" Mangudya PhD ( Univ. of Caribbean ) that !

ace mukadota - 23 September 2018

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