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Business Reporter
ZIMBABWE’S broad money supply accelerated in June after surging 5,1 percent year on year, faster than May’s 3,75 percent rise, according to the Reserve Bank of Zimbabwe. On a month-on-month basis, broad money supply, or M3, rose by 1,25 percent in June to $4,54 billion, the central bank said in its latest monthly economic review for June.

“The annual growth in broad money was driven by increases across the entire spectrum of deposits,” said RBZ.

“Long term savings and short term deposits rose by 19,02 percent, 8,04 percent and 2,1 percent, respectively. Demand deposits also increased by 0,76 percent.”

In terms of composition, demand deposits accounted for 47,96 percent, short term deposits for 19,73 percent, long term deposits for 19,02 percent and savings deposits, 13,23 percent.

Broad money is made up of the consolidated deposits of the entire banking sector, which amounted to $4,5 billion in May.

The process of consolidation entails netting off all interbank transactions, including intra-sectorial deposits.

Broad money computation, also nets out government and non-resident deposits, the central bank said.

The figures also showed that banking sector credit to the domestic economy continued on an upward trend, increasing by 4,42 percent to $5,03 from $4,81 billion in May.

On an annual basis, growth in credit to the private sector stood at 3,87 percent in June 2015, down from 4,78 percent in May 2015.

The monthly growth in credit to the private sector, however, dipped by 0,57 percent from $3,76 billion in May, to $3,74 billion in June.

During the period under review, loans and advances constituted 83,67 percent of the total credit to the private sector, mortgages advanced by building societies, 12,42 percent; other investments, 2,58 percent; bankers’ acceptances, 0,68 percent and bills discounted, 0,65 percent.

On a sectoral basis, credit to agriculture constituted 19,39 percent, services 17,23 percent; manufacturing; 13,72 percent; distribution 15,60 percent; mining 6,11 percent; transport and communications 3,29 percent while construction got 1 percent.

Credit to households remained high at 19,88 percent of total credit to the private sector in June.

Credit to the private sector was mainly channelled towards asset purchases, 45,47 percent; inventory build-up, 33,04 percent; consumer durables, 12.58 percent; and vehicle purchases, 3.11 percent.

The proportion of borrowed funds utilised for capital development remained low at 4,69 percent of total loans and advances.