Zim attains US$ 2,7 billion foreign exchange surpl...

Zim attains US$ 2,7 billion foreign exchange surplus

Highlights

Foreign exchange rate premium declined from of 140% in May 2022 to current levels of between 5% and 15%,
Foreign currency receipts increased 32.4% increase from US$5.8 from same period in 2021
9516 gold coins valued at ZW$9 billion had been sold as at 23 September 2022,
35% sold to individuals and 65% to corporates

Resolutions

Bank policy rate and medium-term lending rate to be maintained at current levels of 200% and 100% respectively.
Maximum amount that entities can purchase from banks under the willing-buyer willing seller system increased from US$20,000 to
US$100,000

The Reserve Bank of Zimbabwe governor Dr John Mangudya says the country had a surplus foreign exchange position of US$ 2.7 billion, as at 31 August, placing it for positive external sector stability.

Dr Mangudya revealed this in a statement on the Monetary Policy Committee of the Reserve Bank of Zimbabwe meeting held on 23 September 2022.

Read full statement here:

https://zimbabwenow.co.zw/articles/453/resolutions-of-the-monetary-policy-committee-meeting-held-on-23-september-2022

“Foreign currency receipts stood at US$7.7 billion as at 31 August 2022, representing a 32.4% increase from US$5.8 billion recorded during the same period in 2021. The foreign currency receipts compare favourably with the corresponding foreign payments which amounted to US$5.1 billion as at 31 August 2022, translating into a surplus foreign exchange position with attendant positive implications for external sector stability,” says Dr Mangudya.

A trade surplus is an economic measure of a positive balance of trade, where a country's exports exceed its imports. It is the opposite of a trade deficit. Zimbabwe has been battling a foreign exchange deficit for years as imports values far outstripped those of exports.

In the statement Dr Mangudya said that RBZ is moving towards further liberalization of the foreign exchange market with corporates now able to buy US$100 thousand weekly through bank platforms on the willing buyer willing seller basis.

This is line with the recommendations of a recent International Monetary Fund Mission to Zimbabwe.

https://zimbabwenow.co.zw/articles/444/imf-staff-concludes-staff-visit-to-zimbabwe

Dr Mangudya further said that the MPC is confident of a continued positive outlook, “as reflected by robust performance in foreign currency receipts, will provide further impetus to the achievements relating to the exchange rate and price stability.”

The central bank is counting the combination of the current tight monetary policy, liquidity mop up from gold coins and strict monitoring and enforcement by the Financial Intelligence Unit to keep the exchange rate under control.

The financial authorities have moved to stamp down institutionalised corruption within government spending systems which were bleeding the fiscus through gross overpricing and wildly speculative exchange rate pegging.