Zimbabwe’s central bank, the Reserve Bank of Zimbabwe(RBZ) experienced an increase in the reserve money for the week ending 20th November 2020.
This stock of money pertains to funds banks are allowed to hold at any given moment, which is readily available for purposes of lending or availing to clients and borrowers without negatively affecting the economy.
The central bank has been keeping a hawk’s eye on liquidity, as it maintains a stranglehold on money rapid supply growth, which can upset the macro-economic stability brought about by exchange rate stability.
In its latest update, the central bank said reserve money increased by ZW$3.18 billion, to ZW$18.37 billion, largely reflecting an increase in banks’ liquidity (RTGS balances) at the Reserve Bank, by ZW$3.09 billion.
“The rise in reserve money was largely due to an increase in Government expenditures, associated with the payment of annual bonuses, in addition to the Government’s monthly salary and wage bill.
This saw Government deposits at the Reserve Bank falling by ZW$2.33 billion during the week under review, thus injecting liquidity into the market,” reads the update.
This increase in reserve money is well in line with the Bank’s targeted 25% quarterly growth in reserve money by end-December 2020.
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