Zim annual money supply hits $10bn

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ZIMBABWE’s annual broad money supply (M3) rose by 35,68 percent to $10,1 billion in September 2018, from $7,5 billion in September 2017 driven by an increase in demand deposits and currency in circulation, latest data from the central bank has shown.
This comes as the supply of bond notes in circulation increased to $354 million in June this year, surpassing the $200 million Afreximbank facility backing the surrogate currency.
The central bank has previously indicated that it was negotiating a new facility for the bond notes, but has not updated on progress.
“The growth in money supply, largely reflected yearly increases in demand deposits by 44,73 percent and currency in circulation, 101,63 percent,” the Reserve Bank of Zimbabwe (RBZ) said.
M3 is a measure of the money in circulation which includes physical currency and demand deposits. It is also considered an important instrument for controlling inflation.
Zimbabwe’s official inflation is at 20,85 percent for the month of September.
Annual declines of 6,11 percent and 5,25 percent in negotiable certificates of deposits (NCDs) and time deposits, partially offset the growth in money supply. On a month-on-month basis, broad money increased by 3,32 percent, from $9 billion in August 2018 to $ 10,1 billion in September 2018.
“Broad money comprised of demand deposits, 79,92 percent; time deposits, 14,71 percent; currency in circulation, 4,85 percent; and negotiable certificates of deposits, 0,52 percent, during the month under analysis,” said the RBZ.
It said annual private sector credit grew by 6,98 percent in September 2018, from 3,94 percent in August 2018.
“On a monthly basis, credit to the private sector increased by 4,43 percent, from $3,7 billion in August 2018 to $3,9 billion in September 2018,” said the RBZ.
During the month under review, households accounted for 26,54 percent of total credit, followed by agriculture at 17,97 percent; distribution at 13,60 percent; services at 12,76 percent; manufacturing at 10,50 percent; financial organisations and investments at 6,36 percent; mining at 4,48 percent; construction at 3,15 percent; and transport and communications at 2,07 percent. newsdesk@fingaz.co.zw