By Alois Vinga
Foreign currency deposits held across the banking sector have increased to $108 billion under clear signs the prevailing economic stability has contributed to the upturn.
The latest Reserve Bank of Zimbabwe (RBZ) monthly economic report covering the period ended January 2021 shows a significant increase in US dollar deposits.
“The foreign currency component of the deposits included in broad money increased from an equivalent of $12.46 billion in January 2020 to $108.59 billion in January 2021,” the report says.
The deposits for 2020 covered the period before the introduction of the RBZ foreign exchange auction system while the latest figures come in the post auction inception.
The platform, coupled with other policy interventions, has gone a long way in stabilising exchange rates and easing inflationary pressures while in the process restoring the banking public’s confidence.
“The growth also partly reflected valuation changes owing to movements in the exchange rate over the year to January 2021. The Zimbabwe dollar depreciated from $17.35 per US$1 in January 2020 to $82.68 per US$1 by January 2021,” said the RBZ.
During the period under review, local currency deposits also registered an annual growth of 384.11% in January 2021, while currency in circulation increased by 28 %.
The figures are consistent with reports being produced by local banks which have also registered an upsurge in both local and foreign currency.
Merchandise imports eased by 12.7%, from US$527.2 million in December 2020 to US$460.3 million in January 2021.
The monthly decline in merchandise imports for the month of January 2021 was mainly on account of reduced imports of diesel, fertilisers, crude soya bean oil and electricity.
Improved domestic hydro-electricity generation helped to reduce the country’s electricity import bill.