Forex receipts reach $5,1bn

RESERVE Bank of Zimbabwe governor John Mangudya said the bank recorded foreign currency receipts valued at $5,1 billion during the first nine months of 2018, up from $4,6 billion in prior year.
Mangudya made the remarks when he met producers of basic commodities to discuss pricing and challenges affecting producers at the Confederation of Zimbabwe Industries (CZI) head office a fortnight ago.
“This (foreign currency receipts) means our exports have been going up by aggregate numbers, indicating that the economy is not doing badly, but the demand for goods and services has also been going up,” he is quoted saying in the latest CZI newsletter.
During the first nine months of 2016, foreign currency receipts amounted to $2,96 billion.
“Corporates have been recording higher sales. Consumer spending and demand has also been going up hence the mismatch. Any increase in demand needs to be backed by foreign currency. The source of this consumer demand is coming mainly from government. This points to the need to rebalance and stabilise the economy,” said Mangudya.
At the meeting, Mangudya said he was aware of the debts affecting various companies and the need for strategies to deal with both currency requirements and legacy debts.
The newsletter reported that Mangudya informed the meeting that he felt it was important to meet with manufacturers and strategise on how to stabilise the supply of commodities in this economy and assist in boosting capacity utilisation.
“The governor indicated that the Reserve Bank has taken it upon itself to secure lines of credit for the whole industry. However, he said, given the circumstances, sequencing will be key in prioritising the list and providing those in more urgent need,” said the CZI newsletter.
The RBZ said it would work directly with industrial associations in consolidating foreign currency requirements for the value chains. A suggestion was made for the RBZ to consider bulk allocations directly to associations in return for which associations’ help in monitoring utilisation of forex allocations and product price movements.
“The RBZ would also closely monitor companies receiving support from the Reserve Bank in terms of forex allocations to ensure product price movements remain ‘in check’ and that any price increases would be justified based on requirements not covered by the allocated forex from the central bank,” the newsletter reported.
The improved foreign currency generation comes mainly from a general improvement in exports arising from incentives to exporters.
There was also an improvement in gold production, one of the country’s main sources of foreign currency. The country’s other main source of foreign currency is tobacco.
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