Zimbabwe’s M2 growing at unsustainable rate, Hanke

Renowned American economic analyst Professor Steve Hanke says Zimbabwe’s money supply is growing at feverish rate.

“Zimbabwe’s money supply (M2) is growing at a FEVERISH 199%/yr.

It’s no surprise that today I measure Zimbabwe’s inflation at an OUTRAGEOUS 996%/yr, making it the world’s TOP INFLATOR,” he says.

Apparently, M2 is the sum total of all of the currency and other liquid assets in a country’s economy on the date measured.

The money supply includes all cash in circulation and all bank deposits that the account holder can easily convert to cash.

Governments issue paper currency and coins through their central banks or treasuries, or a combination of both. In order to keep the economy stable, banking regulators increase or reduce the available money supply through policy changes and regulatory decisions.

Meanwhile, excessive growth in M2 if not matched by increased production and real economic activity (Zim’s case), can lead to inflationary pressures and financial instability.

Central banks and monetary authorities closely monitor M2 money supply as part of their monetary policy framework.

Zwnews