Reserve Bank of Zimbabwe : Money Update as at 18 September 2020

UPDATE ON RESERVE MONEY

AS AT 18TH SEPTEMBER 2020

RESERVE MONEY

1. Reserve money increased by ZW$337 million to ZW$14.16 billion over the week ending 18 September 2020, from ZW$13.83 billion recorded during the previous week.
2. The growth in reserve money largely reflected an increase of ZW$280 million in banks' deposits at the Reserve Bank. The increase in banks' liquidity reflects preparations by corporates for the Quarterly Payment

Date (QPD) tax obligations, due by 25 September 2020.

.

1. The fall in Government deposit by ZW$1.2 billion also reflects release of liquidity into the economy, over the week under review.
2. Required reserves and currency issued also rose by ZW$39 million and ZW$22 million, respectively, during the week under review.
   Table 1: Reserve Money Developments (ZW$ Millions)

																									PRELIMINARY ESTIMATES
																												Week			Week
				Jan-20			Feb-20			Mar-20			Apr-20			May-20			Jun-20			Jul-20			Aug-20			Ending			Ending
																												11 Sept-20			18 Sept-20
	Currency Issued by	1,137		1,217		1,308		1,341		1,456		1,671		1,898			2,052			2,121			2,143
	RBZ*
	Banking Sector			7,254			7,089			8,789			10,199			12,082			10,420			11,457			9,777			11,171			11,491
	Deposits at RBZ
	Statutory (Required)	1,041		1,083		1,205		1,214		1,387		890		1,050			1,186			1,279			1,318
	Reserves
	Banks' RTGS			6,213			6,006			7,584			8,895			10,696			9,529			10,408			8,591			9,892			10,172
	LiquidityΩ
	Other Deposits@	861		1,075		1,608		920		277		582		2,790			288			533			528
	Reserve Moneyπ			9,251			9,381			11,705			12,460			13,815			12,652			16,145			12,117			13,825
																					14,162

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																									PRELIMINARY ESTIMATES
																						Jul-20						Week			Week
				Jan-20			Feb-20			Mar-20			Apr-20			May-20			Jun-20					Aug-20			Ending			Ending
																												11 Sept-20			18 Sept-20
	Memorandum Items
	Currency
	Issued/Reserve			12.3%			13.0%			11.2%			10.8%			10.5%			13.2%			11.8%			16.9%			15.3%			15.1%
	Money Ratio
	Currency in
	Circulation**	2.7%		2.5%		2.2%		2.0%		1.9%		1.2%		0.9%			1.4%			1.5%			1.5%
	/Deposits Ratio
	Monthly Change in			-16.4%			-3.3%			26.3%			18.5%			19.0%			-10.9%			-9.22%			10.11%			3.47%			2.84%
	RTGS Balances
	Monthly Change in	-10.4%		1.4%		24.8%		6.5%		10.9%		-8.4%		27.6%			6.02%			5.10%			2.44%
	Reserve Money
	Government Deposits			3,144			3,347			2,847			2,967			2,092			7,457			6,022			11,520			14,203			13,002
	at RBZ (Stock)ψ
	Other Deposits at
	RBZ																							3,824			2,972			3,311
	(FPR a/c)
	Monthly Inflation©			2.2%			13.5%			26.59%			17.64%			15.13%			31.66%			16.65%			1.41%			N/A			N/A
	Inter-Bank Exchange	17.35		17.95		25.00		25.00		25.00		57.36		76.76			83.40			82.70			81.71
	Rate
	Notes:

• Currency Issued - refers to bank notes and coins issued by the Reserve Bank of Zimbabwe.
• Currency in Circulation - refers to the currency circulating outside the banking system. This excludes currency held in the vaults of banks.

• These are deposits that banks place in the Real Time Gross Settlement (RTGS) System for purposes of meeting their inter-bank transactions.

• Figures may reflect positions as at last Friday of the month. See Monthly Reviews for month-end positions.

• Other Deposits at RBZ are mainly proceeds of drawdowns from foreign currency loans, which are advanced to Fidelity Printers & Refiners (FPR) to purchase gold from the gold producers. The amounts are, therefore, purely accounting entries, which do not represent money creation. With effect from 7th August 2020, this foreign exchange deposit will now appear as a memorandum item.

• Provisional.

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© Blended Inflation Rate - from July 2020, the rate reflects the combined local currency and foreign currency price indices.

N/A - not yet available.

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