The Reserve Bank of Zimbabwe dominating the Harare skyline. Image credit Nehandaradio.com
ZIMSEC O Level Commerce Notes: Money and Banking: The Reserve Bank of Zimbabwe
- It is the banker’s bank and owned by the
Government of Zimbabwe. It is also known as the Central Bank. - A Central bank is a national bank that provides financial and banking services for its country’s government and commercial banking system, as well as implementing the government’s monetary policy and issuing currency.
It should be known that ever since the adoption of a multi-currency regime the RBZ has lost a significant number of its roles, perhaps temporarily, some of these functions are not being carried out due to this.
Functions
- It issues notes and coins through commercial banks.
- A banker’s banks i.e it keeps minimum deposits for commercial.
- It acts as a banker to the government i.e revenue is paid into it and payments are met out of it.
- It carries out the government’s monetary policy by controlling interest on debt and the value of the Zimbabwean dollar.
- A lender of last resort to commercial banks and discount houses.
- It acts as a clearing house tin settling interbank debts.
- It rations foreign currency and controls the issue of foreign currency.
- It acts as an advisor to the government on economic issues and ways of controlling inflation.
- Sells Treasury bills on behalf of the government.
- Withdraws and replaces worn out notes and coins.
- A custodian of the nation’s reserves of gold and foreign currency or foreign assets.
- Keeps state departments accounts.
- Controls and regulates the supply of money.
- Manages the national debts.
- Offers banking services to commercial banks.
- Controls the lending rate.
To access more topics go to the Commerce Notes page.
