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

 
Author/Editor: Muñoz, Sònia
 
Publication Date: April 01, 2007
 
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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(s): Central banks | Zimbabwe | Inflation | Deficit financing

Author's Keyword(s): Quasi-fiscal deficit | Central banking | high inflation
 
English
Publication Date: April 01, 2007
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2007098 Pages: 20
Price:
US$18.00 (Academic Rate:
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