Zim poverty worsens
RESERVE money, which refers to local banks’ balances sitting with the apex bank, dropped by 2% to $16,66 billion as at July 31 2020, according to latest statistics from the Reserve Bank of Zimbabwe (RBZ).
Data gathered from RBZ show that reserve money decreased by $345,1 million, from $17,01bn recorded on July 24 2020 to $16,66 billion as at July 31 2020.
“An increase of $802,4 million in government deposits at the Reserve Bank, due to increased revenue collections, resulted in a corresponding decrease in RTGS balances, by $1,2bn, over the week under review,” the central bank said.
The RBZ said partially offsetting the decrease in reserve money was an increase in other deposits by $752 million, largely due to the 5,9% depreciation in the auction rate over the week.
“Required reserves and currency issued also increased marginally,” it said.
Reserve money also known as highpowered money, base money and central bank money, represents the base level for money supply or it is the highpowered component of money supply.
Through the auction system, the apex bank has found a working formula to deal with the problem of exchange rate volatility which has driven exponential price increases since February this year.
Since the inception of the auction system, economic players have used their RTGS balances to purchase foreign currency and in the process depleting the level of reserve money in the economy.
During the week under review, businesses bought foreign currency worth US$14,36 million from the auction system at a weighted average rate of $76,76 to US$1, resulting in a decrease in RTGS holdings.
THE amount of money an average household of five requires to purchase both food and non-food items rose 33,5% to $11 334 as of June 2020, latest data from the Zimbabwe National Statistics Agency (ZimStat) has shown.
In May this year, the total consumption poverty line (TCPL) was pegged at $8 484.
“The TCPL for an average of five persons stood at $11 333,80 in June 2020. This means that an average household required that much to purchase both food and non-food items for them not to be deemed poor. This represents an increase of 33,6% when compared to the May 2020 figure of $8 483,63,” ZimStat said.
This amount is beyond the reach of the majority Zimbabweans who also have to bear with price spikes, rising inflation and eroding incomes.
The situation has been exacerbated by exchange rate movements.
The World Food Programme last month appealed for an additional US$250 million to support a rapidly expanding emergency operation for millions of Zimbabwe at risk.
WFP projections indicate that by year end, the number of food insecure Zimbabweans will have surged by almost 50% to reach 8,6 million — a staggering 60% of the population — owing to the combined effects of drought, economic recession and the COVID-19 pandemic.
The TCPL for one person shot to $2 267 in June 2020 from $1 697 in May.
“The TCPL for Zimbabwe stood at $2 266,76 per person in June 2020. This means that an individual required that much to purchase both non-food and food items as at June 2020 in order not to be deemed poor. This represents an increase of 33,6% when compared to the May 2020 figure of $1 696,73,” ZimStat said.
Furthermore, the food poverty line (FPL) for an average of five persons per household in June 2020 increased by 40% to $4 749 from $3 398 in May 2020.
“The food poverty line (FPL) as at June 2020 stood at $949,71. This represents an increase of 39,8% over the May 2020 figure of $679,55,” ZimStat said.
ZimStat said the poverty datum lines vary by province as prices vary from place to place.
The TCPL for an average household in June 2020 ranged from $11 918 in Matabeleland North province to $10 361 in Mashonaland East province.
The differences are explained by differences in average prices in each province.