HomeBusiness DigestMoney Supply Up 64 113%

Money Supply Up 64 113%

MONEY supply (M3) growth continued on an upward trend, increasing to a new record of 64 113% in December last year from 51 768,8% the previous month, officials figures showed this week.

The Reserve Bank of Zimbabwe (RBZ) this week said annual broad money growth recorded a 64 113% growth during the month of December.

Largely contributing to the increase in broad money growth were increases in credit to the private sector at 177 043,5% and to public enterprises at 60 826,8%.

“Net credit to government increased from $993,4 trillion in November 2007 to $118,5 trillion in December 2007. Domestic credit also rose by 156 168,6% to $490,5 trillion in December 2007,” the bank said.

Narrow money rose by 66 658,6% from December 2006 to December 2007.

Quasi-money grew by 88,3% in December 2007, indicating a decline from 142,4% recorded in November.

Money supply is the total supply of money in circulation in a given country’s economy at a given time.

It is considered an important instrument for controlling inflation.

The continuous rise in money supply would further trigger inflation, which is currently at 165 000%.

Analysts said the figure would be over 100 000% by January due to expansionary fiscal and monetary policies being implemented by the government and the central bank.

Last month the central bank introduced higher bearer cheque denominations of $25 million and $50 million.

This followed the $1 million, $5 million and $10 million that were introduced two months ago.

By Paul Nyakazeya

Recent Posts

Stories you will enjoy

Recommended reading

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

NewsDay Zimbabwe will use the information you provide on this form to be in touch with you and to provide updates and marketing.