Published: 28 August 2013

Zimbabwe's broad money supply, an indicator of inflation declined 3 percent in June this year to $3,84 billion from December 2012, data from Finance Ministry revealed.

Broad money is a measure of money supply that includes more than just physical money such as currency and coins (narrow money). It generally includes demand deposits at banks and any funds held in easily accessible accounts.

Over the last months, particularly from December to end of July, there was a depressed business activity due to electioneering as households, businesses and investors developed a wait and see attitude prior to the July 31 harmonized elections.

Even the banks restrained from onward lending. More so, traditional international banks such as Barclays could not access offshore funds due to political hang over.

All these combined factors affected the circulation of money and its growth. This also explains why liquidity problem worsened this year. The aggregate demand is expected to grow 7 percent this year, outgoing Finance Minister Tendai Biti said in July this year. It is down from the original forecast of 12 percent.
- herald

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