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200 companies control 50% deposits, says RBZ

17 Feb 2020 at 12:54hrs | Views
The Reserve Bank of Zimbabwe (RBZ) says it will use various open market operation tools to deal with uneven distribution of money in the economy amid indications 50 percent of total bank deposits are concentrated in the hands of only 200 corporates.

Critically, the central bank said doing so was important to counter potential hazards such as speculative currency trading, which have potential and risk of upsetting exchange rate stability and consequently, drive inflation.

The bank and Treasury are targeting annual inflation rate of around 50 percent and monthly rate lower than 5 percent by end of this year. The monthly rate for January currently stands at 2,2 percent from 16,55 percent in December 2019.

The planned measures come against the backdrop of speculative currency trading on the parallel market by cash rick firms, largely considered to be the main cause of exchange rate volatility, which has led to sustained increases of exchange rate indexed prices.

Presenting the 2020 Monetary Policy State Statement in Harare yesterday, RBZ Governor Dr John Mangudya said the level of liquidity as measured by banking sector deposits stood at $34,5 billion as at December 2019.

More to follow....

Source - the herald
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