Reserve money which refers to funds banks are allowed to hold by the Reserve Bank of Zimbabwe (RBZ) for purposes of lending without negatively affecting the economy, decreased by ZW$149.39 million to ZW$24.31 billion for the week ended 16 July 2021.
The stock of money stood at ZW$24.46 billion in the week prior.
“The decrease in reserve money largely reflected a decrease of ZW$456.83 million in banks’ liquidity at the Reserve Bank (RTGS balances), which was partially offset by increases of ZW$188.64 million and ZW$118.81 million in required reserves and currency issued, respectively,” the Reserve Bank of Zimbabwe said.
The Central Bank has been keeping a close check on money supply in the economy as it seeks to manage inflationary pressures and the stabilization of the local currency.
The Bank has been drip-feeding ZWL$360 million equivalent of the new ZWL$ 50 notes into the market during the past week through normal banking channels but maintained there was no growth in money supply as banks will simply swap their balances to access the new notes from the central bank.
There are widespread fears that the proposed issuance of even higher denomination notes such as the ZWL$ 100 notes by the bank will push inflation although the RBZ Governor, Dr John Mangudya has allayed fears saying the Bank will close monitor money supply in the economy.
