Central Bank Quasi-Fiscal Losses and High Inflation in Zimbabwe: A Note, Issues 2007-2098
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.
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Central Bank Quasi-Fiscal Losses and High Inflation in Zimbabwe: A Note
Ms. SÚnia MuŮoz
Limited preview - 2007
Accounting standards require assets and liabilities auction bank quasi-fiscal losses bank's budget central bank functions central bank losses central bank quasi-fiscal central government Commercial banks debt deficit diaspora rate eliminate QFAs exchange from exporters exchange rate fair value financial institutions financial position fiscal foreign assets foreign exchange Foreign liabilities former QFAs funds included income statement increasing transparency inflation accounting interest cost issuance loans to government macroeconomic macroeconomic impact monetary base monetary impact monetary management monetary policy negative net worth negative real interest nominal interest payments nominal interest rate official rate open market operations operating expenses operational balance percent of GDP primary balance PSF/ASPEF public enterprises quantifies RBZ balance sheet RBZ's quasi-fiscal losses real interest rates realized exchange losses recapitalizing the RBZ remunerated liabilities Reserve Money Growth seigniorage sheet items statutory reserves subsidized lending Teijeiro transferring treasury bills unrealized exchange losses unrealized loss Vaez-Zadeh valuation losses zero Zimbabwe Zimbabwe's