Zim forex inflows up 2,3pc in first 10 months
Zimbabwe’s foreign currency inflows rose 2,3 percent to US$9,44 billion in the first 10 months of 2023 from US$9,23 billion in the comparative period, the Reserve Bank of Zimbabwe (RBZ) announced Monday in its resolutions of the monetary policy committee meeting held on December 1, 2023.
Since 2009, diaspora remittance flows have steadily outpaced official development assistance, portfolio investments and foreign direct investment (FDI) in terms of foreign currency inflows.
“Diaspora remittances alone contributed 16 percent of the country’s foreign currency inflows as at October 31, 2023,” RBZ Governor and MPC chairperson Dr John Mangudya said in a statement.
“Thus, the MPC underscored the need to leverage Diaspora remittances for development as part of a broader package of measures to cushion the economy from recurring global shocks.”
The surge in remittances has sparked a race for stakes in the billion-dollar remittance market, with domestic and foreign fintech companies competing with established banks and money transfer companies for market share.
Almost all financial institutions in the nation are placing their bets by opening remittance centres, where they provide a specialised service for a variety of remittance services.
The bank also resolved to maintain the current bank policy rate at 130 percent in line with prevailing inflation developments, complementing recently announced fiscal measures aimed at sustaining stability.
The government has over the past few months instituted a plethora of measures in an effort to stabilise inflation and exchange rate volatility, and due to the continued tight monetary and fiscal policies, annual inflation is projected to end in 2023 slightly below 20 percent.
According to the latest resolutions the RBZ has committed to pursuing a tight monetary policy stance to safeguard the prevailing macroeconomic stability and ensure that inflation expectations remain anchored in the short to medium term.
“Considering the prevailing macroeconomic environment, the MPC resolved to maintain the current bank policy rate at 130 percent and the medium-term bank accommodation facility interest rate for the productive sector, including individuals and MSMEs, at 75 percent, which rates will be reviewed in line with inflation developments from time to time,” the governor said.
According to the statement, the MPC met on December 1, 2023, and deliberated on the recent macroeconomic developments in the country and the 2024 national budget presented on November 30, 2023.-businesswekly
