Forex deposits up 55pc in August
Foreign currency deposits, on a broad money basis, registered growth of 55,53 percent in the year to August 2021, latest statistics from the Reserve Bank of Zimbabwe (RBZ) show.
The foreign currency deposits increased from $86,01 billion (ZW$) in August 2020 to $133,77 billion in Augustthis year.
The growth in FCA deposits was largely driven by revaluation changes, owing to the movement of the exchange rate from $83,40 per US$1 in August 2020 to $86,06 per US$1 in August 2021.
Contrary to the annual growth, FCA deposits were down month-on-month in the period under review, after they declined by 5,24 percent from $141,17 billion in July to $133,77 billion in August.
FCA balances stand at US$1,8 billion, the central bank indicated in the update to the market released this month, as confidence in the country’s economy and banks keeps bulking.
Meanwhile, broad money declined from $330,66 billion recorded in July 2021 to $329,19 billion in August.
During the period under review, domestic claims rose by 11,40 percent to $207,41 billion with the growth largely driven by increases of 24,58 percent in net claims to the Government and 7,13 percent in credit to the private sector, according to the apex bank.
The local currency component of deposits in broad money registered an annual growth of 227,02 percent, while currency in circulation increased by 112,53 percent.
Broad money supply in August was composed of transferable deposits in domestic currency, 49,16 percent, foreign currency accounts deposits, 42,70 percent, time deposits, 6,97 percent, currency in circulation, 0,72 percent, and negotiable certificates of deposits, 0,46 percent.
Monthly growth of 6,97 percent was realised in private sector credit, which amounted to $136,5 billion from $127,6 billion in the previous month of July 2021.
Credit to the private sector was mainly extended towards agriculture, 30,20 percent; households, 20,00 percent; distribution, 11,48 percent; financial organisations, 10,82 percent; manufacturing, 9,85 percent; and services, 8,43 percent.
On a year-to-year basis, credit to the private sector grew by 203,67 percent in August 2021 with the growth in private sector credit not solely as a result of increased production but a reflection of exchange rate movements in the year ending August 2021.
Credit to the private sector was largely channelled towards inventory build-up, 33,91 percent; other recurrent expenditures, 28,69 percent; and fixed capital investment, 18,13 percent.-The Herald
