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'Zimbabwe has $28 billion reserve money' Mnangagwa says

by Mandla Ndlovu
02 May 2022 at 10:06hrs | Views
Zimbabwe has ZWL28 billion in reserve money, President Emmerson Mnangagwa has said. The President made the revelations through an OP-ED that was published in the state-owned Sunday Mail yesterday.

Said Mnangagwa, "Our reserve money has been kept at $28 billion.We are not printing money and have ensured our currency is supported by our reserves. The $28 billion in reserve money is equivalent to US$116 million at current interbank foreign exchange rate of between $225 and $280 per United States dollar."

The President said the government was committed in maintaining the current surplus.

"Clearly, the financial fundamentals to support a stable domestic currency are in place. Yet this is not so, with our domestic currency becoming unstable lately. Fundamentals in the real economy buttress the above positive story.

"This Government is determined to do, including continuing with a tight fiscal policy to maintain the current surplus. As already indicated, a raft of measures will be announced shortly, including measures to increase confidence in the local unit."

Reserve money is also called central bank money, monetary base, base money, or high-powered money. It is the base level for the money supply or the high-powered component of the money supply.

In the most simple language, Reserve Money is Currency in Circulation plus Deposits of Commercial Banks with RBI.

Turning to De-dollarisation, the President said, "De-dollarisation will be managed carefully to avert disruptions. As they say, it takes two to tango. While Government is doing all these things and a lot more, those in business must exhibit greater probity and show greater sense of responsibility.

"No one, least of all business, benefits from macroeconomic instability. Speculative behaviour using currencies accessed from our auction system at official exchange rate stand to hurt all of us, business included. We must desist from such unhelpful behaviour."

Source - Byo24News