Zimbabwe foreign exchange inflows reach $9.44 billion on diaspora remittances

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Zimbabwe has seen a significant rise in foreign exchange inflows, reaching $9.44 billion, bolstered by a robust growth in diaspora remittances, as reported by the Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC).

The committee, led by Governor Dr. John Mangudya, discussed measures to maintain economic stability in the face of global economic challenges and underscored the importance of diaspora funds in the nation’s financial health.

The MPC convened recently to evaluate the country’s monetary policies amidst international financial turbulence. Governor Mangudya emphasized the critical role of diaspora investments in sustaining Zimbabwe’s forex reserves, which have been a primary source since overtaking Foreign Direct Investment (FDI) in 2009. As of the end of October, remittances contributed 16% of the total $9.44 billion in foreign exchange.

The central bank’s policy reforms enacted post-June, which required increased local currency tax contributions on Quarterly Payment Dates (QPDs), have been instrumental in stabilizing the exchange rate and inflation levels. The MPC is advocating for further increases in local currency tax quotas to ensure continued financial stability within Zimbabwe’s dual currency system.

In line with these developments, the committee has endorsed initiatives to enhance the appeal of diaspora investment through fiscal incentives and has committed to revising interest rates in response to inflation trends.

These measures aim to not only attract more investment from nationals living abroad but also to reinforce the country’s economic resilience.