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ZB Warns Against Introduction Of New Money Into The Money Supply

ZB Warns Against Introduction Of New Money Into The Money Supply

ZB Financial Holdings Limited has warned that efforts to stem the inflation surge may fail if the central bank introduces new money into the money supply, a process called quantitative easing, to fund elections and to pacify a restive civil service.

Quantitative easing was one of the factors blamed for the collapse of Zimbabwe’s dollar in 2008 as annual inflation hit a record-high 231 million per cent as per official statistics.

Annual inflation shot to 96,4% last month, from 72% in March, placing Zimbabwe among economies with the highest rates in the world.

On Tuesday the Reserve Bank of Zimbabwe (RBZ) vowed to continue fighting recent turbulences.

But ZB chairperson, Pamela Chiromo, said while there may be improvements in the inflation outturn, threats won’t go away. In a commentary on financial statements for the year ended December 31, 2021, Chiromo said:

The inflation outturn is expected to continue improving in 2022, supported by a tight monetary policy, complemented by fiscal discipline. 

However, the slow-down in inflation remains under threat from possible expansion in the monetary base to fund obligations such as civil service wage increases and the 2023 harmonised national elections, the widening gap between the formal and alternative market exchange rates, among other factors.

ZB said increases in international commodity prices remained a factor of concern.

In a statement issued after a monetary policy committee meeting on April 29, the RBZ on Tuesday shifted the blame for Zimbabwe’s deteriorating crisis to confrontations between Russia and Ukraine.

The RBZ governor said despite the troubles, fundamentals remained strong, with a “stable” exchange rate and healthy foreign currency inflows.

More: NewsDay Zimbabwe


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7 Comments

Asalif 1 week ago

ukaona isu matru comrades takasiya zveZanu pf wozoti iwe pwere yazuro isina kana kudya nyama paIndependence nemasese echitank cheChibuku they the Mps and Ministers havachatodi kubuditsa Mari dzavo financing Zanu pf programs even conference chaiyo havachadi some of the candidates who are aspiring 2023 varikutya kutengera mafans mudzanga chaiwo or scud zvayo they are saying zviri obvious we are not going to win rakadirwa rikazara neCCC


g 1 week ago

hapana Apo ipai ma civil servants Mari nyangwe mukasavapa ndozvingamisa zwl kudonha here. dirai rizare zvedu


Kanda 1 week ago

@vybz Kartel tauraka ndiwe wakaendeswa kuchikoro neZanu pf wajaira commenting on nyon'o dzenyu dzeZanu pf


VYBZ KARTEL 1 week ago

haaa Zanu PF ndakasiya yandidhambisa ndaremba Ini
vote for CCC
vote for Change

Jah🇿🇼Tsvarie-07 1 week ago

politricks...


icho 1 week ago

real bankers are now talking economics 101
not vanaMagudya magrade 7


Gaffer 1 week ago

wat will u expect from Mnangagwa wen one of his financial advisor Ari Java


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