Foreign currency deposits continue to grow

By Alois Vinga

Foreign currency deposits in local banks continue to rise in a development indicating growing confidence in the country’s banking sector, the latest data from the Reserve Bank of Zimbabwe (RBZ) reveals.

Central bank statistics show that foreign currency deposits fell from an equivalent of ZW$103.7 billion, recorded in a comparative period in December 2020, to ZW210.7 billion, recorded in December 2021.

“This was largely due to an increase in the value of foreign currency account (FCA) deposits from $1.27 billion in December 2020 to $1.94 billion in December 2021,” the RBZ said.

A similar trend continued in January 2022 when foreign currency deposits increased by 82.04%.

“The growth in foreign currency deposits, which grew from an equivalent of ZW$108.59 billion in January 2021 to ZW$197.68 billion in January 2022, was largely due to an increase in the value FCA deposits which increased from US$1.31 billion in January 2021 to US$1.71 billion in January 2022,” the RBZ said.

The central bank also considered revaluation due to exchange rate fluctuations as a contributing factor to the increase in the local currency equivalent of FCA deposits.

Central bank records also show that in the month of September 2021, FCA deposits grew by 64% annually, from an equivalent of $92.19 billion in September 2020 to $151.06 billion. in September 2021.

This largely reflects an increase in the value of FCAs from US$1.13 billion in September 2020 to US$1.72 billion in September 2021.

The positive developments were attributed to the decision of the RBZ through Statutory Instrument 85 of 2020 which allowed the free use of foreign currencies in the settlement of local transactions.

The policy guidelines were reinforced by the creation of the Nostro accounts which have been hailed for consistently responding to the demands of the banking public as they can access their money anytime, demystifying past experiences where banks ended up cheating their customers. clients.

These developments, together with other economic measures, have largely restored confidence, which has seen a continued increase in foreign currency deposits.