Foreign currency receipts in Zimbabwe have increased by 32% to $5.09 billion over the past eight months, compared to $3.85 billion during the same time last year.

The majority of Zimbabwe’s foreign currency earnings stemmed from exports, Diaspora remittances and development partner support. As per an update by the Reserve Bank of Zimbabwe (RBZ)’s Monetary Policy Committee (MPC), the economy remains on an upward trajectory with a robust growth outlook.

This momentum is set to gain pace with the recent injection of $961 million from the International Monetary Fund’s Special Drawing Rights allocation.

“In particular, the committee welcomed the impressive performance of foreign currency receipts, which increased by 32% to $5.09 billion as at 7 August 2021 compared to $3.85 billion received during the same period in 2020,” according to the Reserve Bank.

In addition, cumulative foreign exchange payments rose by 42% to $3.59 billion as at the 7 August this year, compared to $2.52 billion for the same period in 2020. This substantial rise in foreign currency receipts is crucial for maintaining the foreign exchange market and bolstering exchange rate stability.

“Against this background, the MPC emphasised the need for staying the course of the current monetary policy stance, which has proven to be effective in combating inflation and fostering monetary stability in the economy,” the bank added.

“Commendably, the prudent monetary policy stance has seen year-on-year inflation dropping from 837.5% in July 2020 to 50.2% in August 2021.”

The RBZ has pledged to continue the measures announced in the Mid-Term Monetary Policy Statement, regarding clearing the foreign exchange allotment backlog of some $175 million within a month, to allow the operation of the auction system as per the rules of funding auction allotments within a fortnight from the auction date.

“The MPC also emphasised the need for banks to avoid the use of overdrafts to fund auction allotments except in exceptional circumstances in support of productive sector activities,” RBZ said.