By Alois Vinga
Foreign currency deposits held in the banking sector increased to $ 108 billion, clearly showing that the current economic stability has contributed to the recovery.
The Reserve Bank of Zimbabwe’s (RBZ) latest monthly economic report covering the period ending January 2021 shows a significant increase in US dollar deposits.
“The foreign currency component of 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 said.
Deposits for 2020 covered the run-up to the introduction of the RBZ foreign exchange auction system, while the latest figures come from the post-auction launch.
The platform, along with other policy interventions, has made a significant contribution to stabilizing exchange rates and easing inflationary pressures while restoring public confidence in banking.
“Growth also partly reflected changes in valuation due to exchange rate fluctuations over the year through January 2021. The Zimbabwe dollar depreciated by $ 17.35 to US $ 1 in January 2020 to 82 , $ 68 to US $ 1 by January 2021, ”RBZ said.
During the period under review, local currency deposits also registered an annual growth of 384.11% in January 2021, while the currency in circulation increased by 28%.
The figures agree with reports produced by local banks which have also seen a surge in local and foreign currencies.
Merchandise imports declined 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 is mainly due to lower imports of diesel, fertilizer, crude soybean oil and electricity.
Improving domestic hydroelectric production has helped reduce the country’s electricity import bill.