Zimbabwe’s export earnings rose 29.1 percent to 4.02 billion U.S. dollars in the first half of 2021 from 3.12 billion dollars realized during the same period last year, despite the impact of the COVID-19 pandemic, the Reserve Bank of Zimbabwe Governor John Mangudya said Thursday.
Of this amount, diaspora remittances received through the formal system amounted to 649 million dollars, an increase of 73 percent from 374.6 million dollars received during the same period last year, said Mangudya.
He noted in the mid-term monetary policy review, Zimbabwe’s economy was on the rebound and expected to grow by 7.8 percent in 2021, despite the difficulties caused by the pandemic.
“Accordingly, inflationary pressures in the economy have dissipated, thus creating a conducive monetary and financial environment essential to supporting the envisaged growth of 7.8 percent in 2021 and a robust economic growth in the medium term,” Mangudya said.
According to him, the foreign currency auction system introduced in June last year had so far disbursed 1.72 billion dollars for the importation of key raw materials and equipment for the productive sectors of the economy. As a result, capacity utilization in the manufacturing sector increased from 36 percent in 2019 to 47 percent in 2020 and is expected to further increase to above 61 percent in 2021.
The banking sector remained stable, safe and sound, despite the disruptive impact of the COVID-19 pandemic and to foster savings and deposits in the banking sector, banks were being encouraged to offer minimum interest rates on savings accounts and fixed-term deposits.
The Reserve Bank of Zimbabwe, the central bank, in consultation with the Deposit Protection Board, is exploring mechanisms to protect foreign currency deposits. And consultations are ongoing to encourage banks to leverage on foreign currency deposits to enhance financial intermediation for the benefit of the economy, he said.
“These measures will allow the circulation of the 1.7 billion U.S. dollars currently sitting in Foreign Currency Accounts, to promote growth and development,” Mangudya said, adding that despite the exogenous global inflation factors, the central bank expects month-on-month inflation to remain stable at around 2 percent during the second half of 2021 and for annual inflation to end the year at around 30 percent, from 56.4 percent in July. Enditem
