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Tobacco sales drive money supply: RBZ

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ZIMBABWE’S broad money supply rose 2.25 percent to $4.3 billion between April and May driven by tobacco sales, figures released by the Reserve Bank of Zimbabwe (RBZ) on Friday show.
The tobacco selling season closed in June with sales having topped $600 million.
“Broad money registered a monthly increase of 2.25 percent between April and May 2014,” the central bank said.
“Expansions were registered in all deposit classes with savings deposits recording the highest annual growth of 12.5 percent. The growth in money supply continued to be driven by tobacco sales.”
The central bank said deposits held by banks were largely driven by local authorities, which accounted for 25.78 percent, followed by financial organisations at 20.08 percent, individuals at 14.60 percent and the distribution sector ay 8.93 percent.
The RBZ said credit to the private sector fell by 0.1 percent to $2.7 billion on a month-on-month basis.
“The slowdown reflects constrained lending by banks on the back of attendant liquidity challenges, as well as risk aversion occasioned by increasing non-performing loans,” the central bank said.
Credit to the private sector remained short term as a result of the liquidity constraints, with companies using the funds mainly for recurrent expenditure, inventory and stock build up, consumer durables and capital expenditure, the RBZ said.
The bank said the agriculture sector, households, distribution and manufacturing sectors accounted for the bulk of outstanding loans and advances.
Turning to payment systems, mobile and internet-based transactions recorded the highest increase in the period at 19 percent, with total transaction amounting to $429 million.
Card systems were up 5.2 percent to $399 million while the value of cheque transactions marginally increased to $10.9 million in May from $9.66 million the previous month.
The value of real gross time settlement transactions however slumped seven percent to $3.2 billion although the volume of transactions increased nine percent to 200 146.Advertisement