Foreign Currency Deposits Grow By US$59 Million

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By Alois Vinga

FOREIGN currency deposits have registered a US$59 million increase inside twelve months, indicating growing confidence in local banks by citizens, latest Reserve Bank of Zimbabwe (RBZ) statistics reveal.

The central bank’s monthly economic review for September 2021 shows that foreign currency deposits have been registering an upward trend.

“The foreign currency deposits component of broad money registered an annual growth of 64%, from an equivalent of $92,19 billion in September 2020 to $151 06 billion in September 2021. This largely reflected an increase in the value of FCAs from US$ 1,13 billion in September 2020 to US$1,72 billion in September 2021,” the report said.

The statistics are consistent with policy measures implemented by the RBZ which include among others, the unlimited access to foreign currency in US$ nostro accounts.

The sustained policy has gone a long way to boost confidence among members of the banking public who used to keep their foreign currency in their homes for fear of losing their savings due to unpredictable policies.

On a monthly basis, foreign currency deposits grew from $133,77 billion in the previous month to $151,06 billion in September 2021

The monthly report also shows that on an annual basis, local currency deposits included in broad money registered a growth of 249,30%, while currency in circulation increased by 80,94%.

During the period under review, broad money increased by $35,41 billion recording 10,76% largely underpinned by an increase in foreign currency deposits.

Credit to the private sector was, in large part, extended towards agriculture, 28,42%; households, 21,31%; distribution, 11,54%; financial organizations, 10,49%; manufacturing, 10,55%; and services, 8,27%.

“Despite the resurgence of renewed inflationary pressures in the economy, continued stability in the macro-economic environment curtailed large changes in inflation rates, compared to the corresponding period in 2020,” the report added.