Annual foreign currency deposits up 55pc in August





HARARE – Foreign currency deposits in broad money registered an annual growth of 55,53 percent in August 2021, according to the latest statistics released by the Reserve Bank of Zimbabwe (RBZ).

The foreign currency deposits increased from $86,01 billion in August 2020 to $133,77 billion in August 2021 and this was on the back of an increase in the value of foreign currency accounts (FCAs), from US$1,03 billion in August 2020 to US$1,55 billion in August 2021.

The growth in FCA deposits was facilitated by revaluation changes, owing to the movement of the exchange rate from $83,40 per US$1 in August 2020 to $86,06 per US$1 in August 2021.

Despite the annual growth, FCA deposits were down month-on-month in the period under review, as they declined by 5,24 percent from $141,17 billion in July to $133,77 billion.  

Annual foreign currency deposits up 55pc in August

FCA balances have since increased to US$1,8 billion according to the RBZ in an update to the market released this month.

Broad money declined from $330,66 billion recorded in July 2021 to $329,19 billion in August.

In the period under review, domestic claims rose by 11,40 percent, to $207,41 billion with the growth largely driven by increases of 24,58 percent in net claims to Government and 7,13 percent in credit to the private sector, according to the apex bank.

The local currency component of deposits in broad money registered an annual growth of 227,02 percent, while currency in circulation increased by 112,53 percent.

Broad money in August was composed of transferable deposits in domestic currency, 49,16 percent, foreign currency accounts deposits, 42,70 percent, time deposits, 6,97 percent, currency in circulation, 0,72 percent, and negotiable certificates of deposits, 0,46 percent.

In the month of August 2021 a monthly growth of 6,97 percent was realised in private sector credit, this amounted to $136,5 billion from $127,6 billion in the previous month of July 2021. Credit to the private sector was mainly extended towards agriculture, 30,20 percent; households, 20,00 percent; distribution, 11,48 percent; financial organisations, 10,82 percent; manufacturing, 9,85 percent; and services, 8,43 percent,

On a year-to-year basis, credit to the private sector grew by 203,67 percent in August 2021 with the growth in private sector credit not solely as a result of increased production but a reflection of exchange rate movements in the year ending August 2021.

Credit to the private sector was largely channelled towards inventory build-up, 33,91 percent; other recurrent expenditures, 28,69 percent; and fixed capital investment, 18,13 percent.  – Business Weekly