Broad money in the economy grew by more than $82 billion between March and April this year, latest
figures from the Reserve Bank of Zimbabwe show.
According to the April Monthly Economic Review, Broad money amounted to $671,37 billion in April
2022, up 13, 7 percent from $589,09 billion in March 2022.
The growth comes as some economic analysts have blamed the depreciation of the local currency on
excess liquidity in the market.
While the central bank had previously focused on keeping Reserve Money growth under a tight leash,
with zero growth now expected per quarter going forward, analysts had focused on Broad Money supply
growth as a source of currency instability.
The local currency has depreciated from $220 per US dollar in January this year to approximately $600
per US dollar.
And in a recent interview with The Sunday Mail, RBZ governor Dr John Mangudya admitted that there is
another source of money supply growth in the economy other than Reserve Money.
"The whole idea of reducing that money supply is to ensure that there is no excess money in the market
to push inflation or to push the exchange rate, which has the pass-through effects of the exchange rate
into the inflation numbers. So we have been doing that.
"Now, having done all those things, we found out there is another form of money in this economy,
which is called broad money.
"There is this other broad money that is going up which is out of banks lending, commercial banks
lending money to the corporates," said Dr Mangudya in the published interview.
So while there was zero growth on Reserve Money, Broad money between March and April grew by
On an annual basis, broad money registered a growth of 156,17 percent, though down from 404,15
percent in April 2021.
The local currency component of broad money grew by 155,04 percent; while foreign currency deposits
increased by 156,57 percent.
The money stock was largely composed of local currency deposits, 54,47 percent; and foreign currency
deposits, 45,01 percent.
During the month under review, net domestic claims increased by 19,18 percent, to $4507,57 billion.
The growth was largely due to increases of $54,85 billion and $23,04 billion in credit to the private
sector and net claims on Government, respectively.
The annual growth in broad money was largely driven by increases of 263,17 percent and 240,68
percent in net claims on Government and credit to the private sector, respectively.
Credit to the private sector mainly benefited the agriculture and household sectors, which received
26,06 percent and 22,09 percent of the total credit, respectively, the central bank disclosed.