Annual money supply up to 9.6pct in January

Annual broad money supply (M3) stood at 9.6 percent in January 2016, reflecting a 1.4 percentage point increase from December last year.

In its latest monthly report, the Reserve Bank of Zimbabwe said on a monthly basis, however, the growth in broad money supply declined to -0.2 percent, from 0.4 percent in December 2015 and in nominal terms, money supply declined from $4.765 billion last December, to $4.754 billion in January this year.

“The monthly decline in money supply growth was underpinned by decreases of $86.38 million and $10.96 million in short and long-term deposits, respectively.”

Demand deposits constituted 53 percent of total deposits, with long-term deposits at 18 percent. Short-term deposits were at 15 percent with savings deposits at 14 percent.

During the period under review, credit to the private sector registered a 4.9 percent annual growth in January 2016, from 0.9 percent in December 2015. Month-on-month, credit to the private sector however declined 0.8 percent to $3.8 billion in January 2016.

The sectoral distribution of private sector credit saw agriculture getting 21.1 percent of total credit; manufacturing 17.5 percent; services, including tourism getting 15 percent. The distribution sector received 13.9 percent of total credit; mining 5.8 percent and construction at 1.3 percent.

Credit to households stood at 19.6 percent in December 2015, partly reflecting the persistent dominance of consumptive borrowing in the economy.

On a monthly basis, banking sector credit decreased 1.1 percent in January 2016 to $5.476 billion while year-on-year growth in total banking sector credit rose to 28.7 percent in January, from 26.4 percent in December 2015.

The RBZ said the credit was utilised in asset purchases at 41.1 percent, inventory build-up, 35.2 percent, consumer durables, 14.2 percent and vehicle purchases, 3.3 percent.

Funds utilized for capital development remained low at 4.9 percent of total loans and advances. Pre and post shipment financing accounted for 1.3 percent of total credit to the private sector.

Meanwhile, the value of transactions processed through the RTGS system in January decreased 19 percent, to$3.39 billion from $4.17 billion recorded in the prior month. Transaction volumes also registered a decrease of 15 percent, from 155 044 to 132 260 over the same period.

Total value of mobile and internet based transactions fell from $690.8 million to $556.6 million during the period under consideration.

Card based transactions also decreased from $557.9 million to $468.9 million while value of cheque transactions registered a 1.4 percent increase, from $10.95 million to $11 million.-The Source

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