Statutory reserves keep money supply on ice

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THE Reserve Bank of Zimbabwe (RBZ) says by restricting resources available for credit growth, statutory reserve requirements continue to play a significant role in its tight monetary policy stance, which is meant to curb inflation.
Central banks around the world use these reserves as an instrument to manage liquidity. A specific percentage of the qualifying liabilities of banking institutions must be maintained as balances in their statutory reserve accounts.

The RBZ kept the statutory reserve ratio for demand and call deposits at 10 percent during the first half of 2022, while that of time deposits also remained unchanged at 2,5 percent.