Finance

Zimbabwe’s reserve money grows 9% to ZWL$13bn

STAFF WRITER

Zimbabwe’s reserve money rose to ZWL$13.154bn as at September 4,2020, representing an increase of 9% from ZWL$12.117bn recorded in the previous week, due to an increase  in banking sector deposits at the central bank and government expenditure, official data from the Reserve Bank of Zimbabwe (RBZ) shows.

Reserve money refers to currency in circulation plus commercial banks’ deposits with the central bank and other deposits to the same.

Banking sector deposits at the central bank increased by ZWL$969m to ZWL$10.771bn in the week under review from ZWL$9.777bn the previous week. Banks’ RTGS balances increased to ZWL$9.560bn in the week from ZWL$8.591bn in the previous week.

There were also increases in required reserves which stood at ZWL$1.211bn from ZWL$1.186bn.

In January, Zimbabwe’s reserve money stood at ZWL$9.251bn and grew to ZWL$16.662bn on July 20 before coming down to ZWL$12.117bn on August 28,2020 after the introduction of the foreign exchange auction system. Now, it has peaked again to reach ZWL$13.153bn, meaning this is likely to increase inflationary pressures.

“Reserve money increased by ZWL$1.037m over the week ending 4 September 2020, largely reflecting an increase of ZWL$969m in banks’ deposits at the Reserve Bank. The increase in banks’ liquidity was attributable to the purchase of foreign exchange from the market by RBZ and government expenditures, all of which raised the deposit levels in the banking system. Foreign exchange purchases by RBZ are mainly for funding the auction,” the central bank said.

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