Foreign currency receipts rise to US$5,5bln in H1

ZIMBABWE’S foreign currency receipts increased to US$5,45 billion in June, a 33,6 percent increase from US$4,07 billion recorded during the same period last year, the Reserve Bank of Zimbabwe (RBZ) has said.
In a Monetary Policy Statement last week, the RBZ governor John Mangudya said the country’s diaspora remittances reached US$797 million in the first six months of the year, representing a 23 percent increase in the corresponding period last year.

Reserve Bank of Zimbabwe governor, John Mangudya

“International remittances comprise transfers by Zimbabweans in the diaspora and international organisations. As at 30 June 2022, total international remittances amounted to US$1,372 billion, an increase of 23 percent from the US$1,113 billion recorded during the same period in 2021,” he said.

An estimated three million Zimbabweans are believed to be in the diaspora and they regularly send money back home to sustain their families.
“Of the total amount, diaspora remittances amounted to US$797 million, a 23 percent increase from US$650 million received during the same period in 2021. International remittances received through the normal banking system on behalf of international organisations amounted to US$575 million, an increase of 24 percent from US$463 million recorded during the same period in 2021,” he said.

Mangudya said during the period under review, banks processed foreign payments amounting to US$3,78 billion. This represents a 19 percent increase in foreign payments from US$3,19 billion recorded for the same period in 2021.
“The upward trajectory in foreign payments was largely on account of increased global prices for fuel and electricity,” he said.
Recently, Finance ministry permanent secretary George Guvamatanga said the country was closing in on another record foreign currency receipts of US$12 billion this year.

Zimbabwe recorded a 53 percent rise in foreign currency receipts to US$9,7 billion in 2021, the highest performance from a previous record of US$7,6 billion recorded in 2013.

Speaking at a media briefing, Guvamatanga said for the period ending May 31, 2022, a record inflow of US$4,9 billion was realised.
“This indicates that if we follow the same rate, we are on course to achieve a record US$12 billion,” Guvamatanga said.

Mangudya has said the US$12 billion foreign currency receipts would be enough to build reserves to sustain the local currency.
Speaking at a Zimbabwe Institute of Strategic Thinking breakfast meeting in the capital last week, Mangudya said the current growth in foreign currency receipts was attributable to favourable commodity prices and improving diaspora remittances.

“We had record foreign currency receipts last year and we have begun this year on a good note. At this rate, we are going to be at US$10 billion to US$12 billion by the end of 2022,” Mangudya said.

Finance ministry secretary George Guvamatanga

According to the central bank, foreign currency receipts last year were buoyed by increased international commodity prices, increased international remittances and gold incentives introduced by authorities.

Export proceeds contributed US$6,2 billion to the country’s foreign currency receipts in 2021, an increase from US$3,7 billion recorded in the prior period. Diaspora remittances increased 42 percent to US$1,4 billion in 2021 from US$1 billion recorded in the prior comparative period.
Foreign investments increased 127 percent to US$91,1 million during the year 2021 from US$40 million recorded in the prior period.
According to the RBZ, banks processed foreign payments amounting to US$6,99 billion last year, representing a 45,2 percent increase from US$4,82 billion recorded during the same period in 2020.

“The upward trajectory in foreign payments was largely on account of increased foreign currency supply from the auction system and exports, consistent with the increased capacity utilisation in industry.

“Consequently, significant increases in foreign currency receipts relative to foreign payments resulted in significant increases in foreign currency deposits in the banking sector to an average of US$1,7 billion in 2021,” the central bank said.
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