Central Bank Quasi-Fiscal Losses and High Inflation in Zimbabwe : A Note

Author/Editor:

Sònia Muñoz

Publication Date:

April 1, 2007

Electronic Access:

Free Full Text (PDF file size is 270 KB).Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Zimbabwe's failure to address continuing central bank quasi-fiscal losses has interfered with both monetary management and the independence and credibility of the Reserve Bank of Zimbabwe (RBZ). Realized quasi-fiscal losses are estimated to have amounted to about 75 percent of GDP in 2006. Because they were financed by creating money creation or issuing RBZ securities, they contributed to the four-digit inflation reached in 2006. The remedy for the current situation is clearly to eliminate the causes of losses by implementing measures to improve the cash-flow of the bank and restore its financial position.

Series:

Working Paper No. 07/98

Subject:

English

Publication Date:

April 1, 2007

ISBN/ISSN:

9781451866629/1018-5941

Stock No:

WPIEA2007098

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

20

Please address any questions about this title to publications@imf.org