Forex deposits reach US$1.3 billion

by | Jul 1, 2021 | Business | 0 comments

Nevanji Munyaradzi Chiondegwa

Measures by the Reserve Bank of Zimbabwe to bring back sanity to the country`s banking sector continue to yield dividends as foreign currency deposits now stand at US$1.3 billion.

The figures were shared by the Apex bank`s Monetary Policy Committee.

The MPC met on June 28 and deliberated on recent economic and financial developments and their implications on monetary policy.

The committee was satisfied with the current macroeconomic stability and the strong positive growth trajectory that is under way.

The trajectory was also confirmed by the International Monetary Fund, the World Bank n African Development Bank.

All the three lateral lenders have given a positive review of the economy of Zimbabwe.

There is a a consensus among them all that while Sub-Saharan Africa’s Economic growth shall be under 3 percent, that of Zimbabwe shall be above 5 percent.


In a statement released by RBZ Governor Dr John P. Mangudya, the MOC said;“The committee is pleased with the current disinflationary trajectory which has seen the annual inflation further falling from 161.9% in May to 106.6% in June 2021. The Bank expects the annual inflation to decline to 55% by end of July and below 25% by December 2021.”

The Bank’s projections may not be off at all given that international Economist and John Hopkins Economics Chair, Prof John Hopkins has calculated the Zimbabwean inflation at 62% this month, much lower than the official figure from ZimStats.

The Committee made the following resolutions to sustain the current Inflation trajectory and support the envisaged robust economic growth for 2021 and beyond;
a) Maintaining the bank policy rate at 40% and the interest rate of the medium term accommodation facility at 30% per annum.

b) Further tightening of monetary policy by reducing the reserve money growth target from 22.5% per quarter to 20% per quarter going forward, while continuing to review the reserve money growth target to achieve and maintain stability of inflation and the exchange rate in line with developments in the macroeconomic d]fundamentals and,

c) Streamlining the foreign currency auction system to reflect macroeconomic fundamentals and ensuring that the country’s productive sector is given priority in terms of allotment
The Bank in consultation with the Deposit protection Board, is exploring mechanism to protect foreign currency deposits.

Consultations are also ongoing to encourage banks to leverage on the foreign currency deposits to enhance financial intermediation for the benefit of the economy.