adminZimbabwe’s broad money (M3) registered an annual growth rate of 552,8 percent to $153,84 billion as at end September 2020 largely due to foreign currency component of the deposits, which increased on account of exchange rate movements.
As at September 30, 2020, M3 consisted of foreign currency account (FCA) deposits, equivalent to $92,11 billion or 60 percent of total deposits), while local currency deposits and currency in circulation constituted the balance, latest figures from Finance and Economic Development Ministry show.
Growth in broad money largely reflected increases in credit to the private sector, while banking sector credit to Government has declined sharply, owing to the fiscal consolidation measures being implemented by Government, Finance Minister Prof Mthuli Ncube said in the 2021 National Budget statement presented yesterday.
“Going forward, the bank (Reserve Bank of Zimbabwe) will continue to utilise all the instruments at its disposal to ensure that money supply in the economy is maintained at levels consistent with the financing requirements of the productive and other sectors of the economy, “said Prof Ncube.
Currently, the central bank was implementing a monetary targeting framework that has been successful in containing money supply growth and stemmed inflationary pressures, the minister added.
The framework targets containing reserve money growth to levels of below 25 percent per quarter in 2020, which remains critical in bringing inflation to regional and internationally acceptable levels, while at the same time sustaining exchange rate and financial sector stability.
Bongani Ndlovu