The Reserve Bank of Zimbabwe has basically admitted what we have known all along, the current depreciation of the Zimbabwean dollar and inflation are, for the most part, the government’s fault. Saboteurs, most of whom are government big wigs or are affiliated with them, are simply making a bad situation worse.
In their latest publication titled Deliberations of the Monetary Policy Committee released today, 29 October the central bank admits it all.
The Committee noted that the increase in reserve money by 80% during the first 8 months of 2019, when compared to the December 2018 position, caused instability in the exchange
rate and resulted in the increase of domestic prices of goods and services…
This is not something new, in fact those who bother to read the RBZ’s reports on money supply already knew this. Since 2013, the government has been on a money “printing” spree except of course they haven’t actually printed trillions as they did back in 2008, it’s all electronic money and treasury bills-broad money as it is known.
An increase in money supply inevitably leads to inflation and sometimes hyperinflation, an extreme form of inflation like the one we are having now. It also leads to the depreciation of the domestic currency which the government has foisted upon an unwilling populace.
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