Annual broad money supply rises 15,98pc

Martin Kadzere Senior Business Reporter
ZIMBABWE’S annual broad money supply rose in November last year, the highest annual increase in two years, on growth in most deposits classes, official statistics show.

Annual growth in broad money rose to 15,98 percent from 12,79 percent in October, the Reserve bank of Zimbabwe said in its November monthly report on Tuesday.

In absolute terms, broad money rose to US$4,41 billion in November from US$3,80 billion a month earlier. “The growth in broad money was driven by increases across all deposit classes, with the exception of short term deposits,” said the RBZ.

Long term deposits registered the largest annual growth of 45,82 percent in November.

Over the same period, savings, demand, and short term deposits, recorded increases of 24,11 percent, and 11,34 percent ,respectively. Short term deposits declined by 0,8 percent.

Despite the growth in the deposit base, the annual increase in domestic credit remained stable at 6,4 percent in November. The growth was underpinned by an annual increase of 39,37 percent in net credit to Government. Credit to the private sector also registered an annual increase of 3,4 percent, the central bank said.

The increase in Treasury Bill issuances partly reflected the slowdown in Government revenue collections due to economic downturn.

On a monthly basis, however, net credit to Government decreased by 1,72 percent, to $462,43 million in November.

Credit to the productive sectors rose 1,8 percent in October, to 3,4 percent in November. In absolute terms, loans to the private sector increased $35,4 million, to US$3,82 billion.

Loans and advances constituted 82,47 percent of the total credit to the private sector, followed by mortgages, 13,40 percent; other investments, 1,75 percent; bills discounted, 1,43 percent; and bankers’ acceptances, 0,95 percent, the central bank said.

The agricultural sector got 19,29 percent of the loans; distribution 15,47 percent; manufacturing 15,24 percent; services 13,88 percent; mining 7 percent; financial 4,04 percent; transport and communications 3,8 percent and construction 1,97 sector.

Households accounted for 18,15 percent of credit to the private sector.

The credit advanced to the private sector was mainly utilized for working capital requirements, procurement of consumer durables and other purchases, said the RBZ.