Parallel market rates, which represent the premium of accessing the US dollar that had become scarce on the market, dropped sharply last week, and the Reserve Bank of Zimbabwe (RBZ) says the trend is likely to continue as exports have jumped to $3,5 billion in the six-month period to June this year.
The remarkable export growth compares favourably with the $3,8 billion that was realised in 2017. In addition to an exponential growth in shipments, Government is now drawing down from a $145 million facility from Afreximbank.
The central bank has also doubled foreign currency imports to $100 million per month.
As of Friday last week, cash vendors were paying $1,60 bond notes for US$1, down from about $1,90 bond notes for the same unit. RBZ Governor Dr John Mangudya told The Sunday Mail last week that the Cairo, Egypt-based Afreximbank has been very supportive. “The improvement in foreign currency supply is attributable to the great support we are receiving from the Afreximbank. They have approved disbursement of funds into the economy and we are also drawing down on the Letter of Credit facility for the importation of essential products to ensure a steady and continuous supply.
“We are currently drawing down an aggregate amount of $145 million in cash and LCs,” said Dr Mangudya.
A significant increase in exports, he said, has also improved foreign currency supplies. Out of the $3,5 billion in exports, $2,2 billion came from the shipment of goods, $630 million from remittances and $588 million from loan proceeds.
“Total foreign exchange receipts for the first six months of this year amounted to $3,5 billion, an increase of 23 percent compared to the same period last year, with exports at $2,2 billion, international remittances at $630 million and loan proceeds at $588 million,” he said.
Dr Mangudya reiterated that those who illegally transact on the parallel market risk suffering huge losses as rates will continue plummeting. “The Reserve Bank is therefore strongly warning those manipulating the parallel market rates that they are going to count their loses soon as the rates that they are charging the unsuspecting and innocent members of the public do not reflect the country’s economic fundamentals at all.”
The central bank, he added, remains alive to the need to import foreign currency to feed industries that supply critical goods and services. “The Bank’s efforts are in addition to the measures that it has put in place to ensure that strategic and essential products such as fuel, bread, cooking oil, electricity, medicines and packaging, et cetera, are available on the market.”
The apex bank has imported $600 million since the beginning of the year in order to ease cash shortages, as well as meet rising demand from recovering industries.
By last week, some banks had increased their cash allocations to depositors.
Afreximbank has been pivotal in supporting the local economy.
Most notably, the bank’s president and board of directors’ chairperson, Dr Okey Oramah, met President Emmerson Mnangagwa 19 days after his inauguration and announced a $1,5 billion economic stabilisation package that was meant to revive the productive sectors of the economy.
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