Money supply up

THE Reserve Bank of Zimbabwe (RBZ) has reported an increase in money supply to 7,5% for the month of November on the back of improved confidence in the banking sector.


The RBZ’s monthly economic review report for November shows the money supply increased to $4,74 billion in November from $4,6 billion in October on a month-on-month basis.

“Annual growth in money supply surged to 7,5% in November 2015, from 3,2% in October 2015. On a monthly basis, broad money increased by 3,1% to $4,74 billion in November 2015. The increases partly reflected a marked improvement in confidence in the banking sector,” RBZ said.

Money supply is the total amount of monetary assets available in an economy at a specific time.

The growth in annual broad money was due to the increases in savings deposits by 12,2%, demand deposits 11,8%, and long-term deposits 9,8%. However, short-term deposits declined by 10,9%.

The composition of the deposits showed that demand deposits were 51%, long-term deposits 21%, short-term deposits 15% and savings deposits 14%.

During the period under review, banking sector credit increased by 2,9% to $5,34 billion from $5,19 billion in October 2015.

In November, credit to various sectors in the economy had agriculture (22,5%) leading followed by credit to households at 18,8%, services including tourism (15,3%); distribution (15,2%); manufacturing (14,8%); mining (5,3%); transport and communications (3,1%); and construction (1%).

Credit to households since dollarisation has averaged 112% of the gross domestic product, showing a lack of disposable income and high unemployment.

In terms of proportions, RBZ said the usage of private sector credit was asset purchases 41,6%, inventory build-up 35,9%, consumer durables 13,8%, and vehicle purchases 3,4%.

Notably, funds utilised for capital development remained low at 4,3% of the total loans and advances.

2 Responses to Money supply up

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    • Donna Turner January 6, 2016 at 11:28 am #

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