Reserve Money Update as at 15 January 2021

UPDATE ON RESERVE MONEY

AS AT 15TH JANUARY 2021

RESERVE MONEY

1. Reserve money for the week ending 15th January 2021 decreased by ZW$1.02 billion to ZW$19.73 billion, compared to the last week's position.
2. The fall in reserve money largely reflected a decrease of ZW$0.88 billion in banks' liquidity at the Reserve Bank (RTGS balances), coupled with a decline of ZW$171.46 million in currency issued. Required reserves, however, rose by ZW$26.52 million.
3. The decline in market liquidity was largely due to net sales of foreign exchange by the Reserve Bank. Government deposits at RBZ also increased by ZW$1.37 billion over the week under review, signifying significant withdrawal of liquidity from banks.
   Table 1: Reserve Money Developments (ZW$ Billions)

																									PRELIMINARY ESTIMATES
																									Week			Week			Week
				May-20			Jun-20			Jul-20			Aug-20			Sep-20			Oct-20			Nov-20			Ending			Ending			Ending
																									31 Dec-20			8 Jan-21			15 Jan-21
	Currency Issued	1.46		1.67		1.90		2.06		2.14		2.12		2.13			2.38			2.55			2.38
	by RBZ
	Banking Sector			12.08			10.42			11.46			10.06			10.25			13.38			15.91			16.38			18.21			17.35
	Deposits at RBZ
	Statutory																1.68		2.01
	(Required)	1.39		0.89		1.05		1.24		1.40					2.20			2.33			2.36
	Reserves
	Banks' RTGS			10.70			9.53			10.41			8.83			8.85			11.70			13.90			14.18			15.87			14.99
	Liquidity

2

																									PRELIMINARY ESTIMATES
																									Week			Week			Week
				May-20			Jun-20			Jul-20			Aug-20			Sep-20			Oct-20			Nov-20			Ending			Ending			Ending
																									31 Dec-20			8 Jan-21			15 Jan-21
	Other Deposits	0.28		0.58		2.79		0.26		0.34		0.02		0.38			0.00			0.00			0.00
	Reserve Money			13.82			12.65			16.15			12.38			12.73			15.52			18.42			18.76			20.76			19.73
	Memorandum
	Items
	Currency
	Issued/Reserve			10.5			13.2			11.8			16.6			16.8			13.7			11.6			12.67			12.28			12.05
	Money Ratio (%)
	Currency in
	Circulation	1.9		1.2		0.9		0.7		0.7		0.7		0.6			1.2			1.2			1.2
	/Deposits Ratio
(%)
	Monthly Change
	in RTGS			19.0			-10.9			-9.2			-15.2			0.3			32.2			18.8			-8.03			11.92			-5.54
	Balances (%)
	Monthly Change																21.9		18.7
	in Reserve Money	10.9		-8.4		27.6		-23.3		2.8					-5.59			10.65			-4.94
(%)
	Government
	Deposits at RBZ			2.09			7.46			6.02			9.52			10.45			5.47			4.65			6.74			8.81			10.18
	(Stock)
	Monthly Inflation	15.1		31.7		35.5		1.4		-0.5		1.4		2.3			2.8			NA			NA
(%)
	Inter-Bank			25.00			57.36			76.76			83.40			81.44			81.35			81.82			81.79			81.79			82.09
	Exchange Rate

3