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Tuesday, May 21, 2024

Half-year forex inflows hit US$5,6 billion

Story by Stanley James, Business Editor

EXTERNAL confidence in the economy is on a positive trajectory after Zimbabwe recorded foreign currency inflows of more than US$5 billion during the first six months of the year.

The 2023 Mid-Term Monetary Policy Statement released this Wednesday by Reserve Bank of Zimbabwe Governor, Dr John Mangudya reveals that the increase is from US$5,2 billion during the same period last year.

Riding on the current inflows, central bank authorities are expecting Zimbabwe to regain a current account surplus for the fifth consecutive year since 2019.

Prevailing interest rates at 150 percent per year are also being maintained.

The appreciation of the local currency against the United States dollar has, however, resulted in the central bank projecting a further decline in month-on-month as well as annualised inflation rates.

The tobacco industry has received a major boost after the announcement that restrictions on the use of locally sourced money to finance production have been removed with immediate effect.

A 31 August deadline for tourism operators with unapproved offshore accounts and unregistered business agreements to regularise their operations has also been affected.

Maintaining the current monetary policy stance is also being cited by monetary authorities as an important element that will anchor exchange rate and inflation rate expectations.

According to the RBZ, economic fundamentals are strong on the back of robust gross domestic product growth, healthy balance of payment position, fiscal sustainability and improved foreign currency inflows.

The central bank is therefore expecting the economy to register a 5,3 percent growth rate on the back of improved production in key productive sectors.

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