The Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya says foreign currency receipts should reach US$ 10-12 billion by end of this year enough to build reserves to sustain the local currency.
Speaking at the Zimbabwe Institute of Strategic Thinking (ZIST) breakfast meeting today, the Central Bank chief said the growth in foreign currency receipts is anchored on favorable global prices of minerals which are key imports for the country and improving diaspora remittances.
During the first quarter to March, the country has already earned US$ 4.5 billion, which is a 34 percent increase from last year comparable period levels.
“We had record foreign currency receipts last year and we have begun on a good note. At this rate we are going to be at US$10-12 billion by end of 2022,” said Dr Mangudya.
Last year Zimbabwe’s total foreign currency receipts reached US$ 9.7 billion which was the highest ever for the country.
However, this was against foreign payments of US$ 7 billion resulting in a positive balance of the payment for the year.
In light of the current currency crisis, Mangudya said it was pleasing to note that the country was building adequate foreign currency reserves to sustain the local currency.
“Currently our banks are sitting on US$ 1.7 billion and add that to the US$ 1 billion in IMF’s SDR it totals US$ 2.7. This is enough to build confidence in our reserves and stabilize our local currency,” added Mangudya.
This comes on the back of weakening of the local currency against the USD which has led to high inflation. In May inflation paced at its fasted rate this year reaching 131.7 percent.
There are however, concerns that foreign payments could also increase this year from last year’s US$ 7 billion given the global inflation from the Russian/Ukraine conflict.
Prices of commodities such as wheat, maize and petroleum products have significantly risen and will likely increase the country’s import bill.