Value of transactions through RTGS declines 12% in May


Transactions processed through the system declined 12% to $3.5 billion from $3.9 billion in April 2015.

THE value of transactions processed through the RTGS system registered a significant drop in May which is traditionally a slow business month while the slow down in the economy is also impacting business transactions (which go mostly via the system) as the economy informalises.

According to the latest Reserve Bank of Zimbabwe monthly review for May, transactions processed through the system declined 12% to $3.5 billion from $3.9 billion in April 2015. During the same, the volume of transactions was down -0.3% to 179 761 from 180 335.

In the same month, annual broad money supply growth further decelerated to 3.75% from 4.93% in April.

The total value of card based transactions increased, to $455.4 mln in May from $433.66 mln in April and mobile and internet based transactions also grew to $514.5 mln from $453.61 mln.

On a monthly basis broad money rose 1.11% to $4.48 bln from $4.43 bln. The central bank notes that the annual growth in broad money continued to be underpinned by increases in long term deposits, 33.70%; and savings deposits, 18.43%. Partially offsetting these increases were declines in demand deposits of 6.05% and 4.31% in short term deposits.

The structure of deposits remained largely unchanged, with demand deposits accounting for 46.42%; long term, 20.73%; short term, 18.86%; and savings deposits, 13.98% of total deposits. Total banking sector credit to the domestic economy increased by 16.42% to $4.817 bln in May, from $4.52 bln in April.

On a year-on-year basis, growth in credit to the private sector was 4.78% in May 2015, up from 4.65% in April 2015. The monthly growth in credit to the private sector posted a marginal increase to 0.02% $3.76 bln in May 2015, from $3.76 bln in April.

During the month of May 2015, loans and advances constituted 82.47% of the total credit to the private sector, followed by mortgages advanced by building societies, 11.92%; other investments, 3.93%; bankers’ acceptances, 0.90%; and bills discounted, 0.78%.

On a sectoral basis, agriculture made up 18.86% of credit; services (17.82%); manufacturing (15.05%); distribution (14.92%); mining (6.28%); transport and communications (3.10%); and construction (1.03%).

Consumptive borrowing by households remained high at 18.33% of total credit to the private sector in May 2015.

Credit to the private sector was mainly channelled towards asset purchases, 45.84%; inventory build-up, 33.84%; consumer durables, 11.15%; and vehicle purchases, 3.02%. The proportion of borrowed funds utilised for capital development remained low at 5.15% of total loans and advances. In terms of allocation, the procurement of plant and equipment, land development, and office equipment, accounted for 3.68%, 0.79% and 0.52%, respectively, of total loans and advances.-FinX