Contrary to speculation that a widespread preference for the US dollar is driving its local usage, the Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) attributes the 70:30 mix of foreign and local currency to surging foreign‑currency inflows. Market observers had suggested that locals were shunning the Zimbabwean dollar in favor of the greenback, but MPC chair John Mangudya said the data tell a different story.
Mangudya noted that the 70:30 currency mix reflects significant foreign‑currency inflows during 2022, a trend expected to continue into 2023. From 1 January to 15 March 2023 the country received US$1.78 billion in foreign currency, a 31.5 % increase over the US$1.36 billion received in the same period in 2022. During that same period, payments amounted to US$1.69 billion.
The local currency also remained widely used, as shown by RTGS transactions settled in the same timeframe. In 2022, minerals accounted for 60 % of the US$11 billion in foreign‑currency receipts, so rising commodity prices are a welcome development. Market analysts project that continued firming of global commodity prices will further boost Zimbabwe’s foreign‑currency earnings, given the economy’s heavy reliance on mineral revenue.
To encourage the use of the US dollar through formal banking channels, the RBZ will work with banks to address high charges on foreign‑currency deposits, Mangudya added.
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