The uptick in the annual broad money growth rate is largely due to an increase of $100 million in savings deposits with commercial banks, a top banker has said.
BY TATIRA ZWINOIRA
According to the Reserve Bank of Zimbabwe (RBZ) monthly report for September, broad money increased to $4 586 000 000 from $4 473 000 000 in August.
Bankers’ Association of Zimbabwe chief executive officer Sij Biyam said the banking sector has been very active in mobilising foreign lines of credit from international lenders such as the African Export-Import Bank (Afreximbank).
“The RBZ report for September 2015 states that this is largely due to the $100 million increase in savings deposits with commercial banks. The banking sector has also been very active in terms of mobilising foreign lines of credit from international lenders such as Afreximbank, which funds have been channelled to the productive sectors in the economy,” Biyam said.
“Since the advent of the multi-currency system in 2009, the banking sector has been playing its part in advocating for the return of a savings culture in the economy.”
Biyam said RBZ has actively supported the banking sector by instituting various measures to bring lasting stability to the sector.
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The increase in deposits comes from government issuing Treasury Bills that act as long-term supply figures to help alleviate debt within the economy and act as a short-term measure to the lack of hard cash in the economy.
Treasury Bills are only realised once they have matured over a specified period of time.
The lack of hard cash is mainly due to reduction in bank loans, operators within the informal market refusing to put money in banks, debt, non-performing loans, business closures, capital constraints, absence of jobs, low exports and increased imports.
As such, the improvement in deposits that are aimed at improving liquidity among banks is virtual money with consumers still set to fail to have liquid cash.
Economist John Robertson yesterday said the strengthening of the United States dollar and lack of wage increases was preventing working family members spread across the region from remitting returns back home.
“Consumers need jobs so that they can earn money, some are receiving money from the Diaspora, but others are struggling, particularly the ones living in South Africa. It is proving to be difficult because of currency fluctuations and their wages not going up,” Robertson said.
“There is a lot of money circulating within the informal market than the that circulating in the banks. However, people are fearful of putting their money in banks because of Zimra. So some companies have decided not to put their money in banks for fear of reprisals over unpaid taxes or arrears.”
He said the fact that Zimra is owed value-added tax was enough to keep those with money from putting their money in the banks.
He added that “consumers need jobs so that they earn money”.
“We need policies that can bring in revenue to the capital account by helping investors start new businesses, money being brought to invest in different sectors,” Robertson said.
