HARARE (Reuters) – Zimbabwe registered $9.7 billion of foreign currency inflows in 2021, a national record driven by high commodity prices and international remittances, the central bank said on Monday.
The southern African country’s economy is battling to recover from years of hyperinflation and mismanagement. The government expects the economy to grow by 5.5% this year, although persistent foreign exchange shortages and a rapidly devaluing currency remain risks to growth.
In a monetary policy statement, the central bank said mineral exports, mainly gold and platinum group metals, had driven foreign currency earnings to a record high.
“The country recorded its highest ever foreign currency receipts of $9.7 billion in 2021, an increase of 53.5% from 2020,” the central bank said. The previous record was $7.6 billion in 2013, it added.
Official foreign currency outflows were $6.99 billion in 2021, according to the central bank.
Mineral-dominated export earnings increased by 28% to $6.3 billion, while remittances from Zimbabweans living and working abroad increased by 43% to $1.4 billion. Foreign loans and investments as well as transfers by donor agencies added to the foreign currency flows.
Gold production increased by 56% to 29.6 tons in 2021, central bank data shows.
Zimbabwe is struggling to stabilise its economy and a volatile currency reintroduced in 2019, after it was ditched in 2009 in favour of the U.S. dollar and other currencies to tame hyperinflation, which reached 500 billion percent in December 2008, according to IMF data.
The central bank kept its main policy interest rate at 60%, but revised its year-end inflation forecast to between 25% and 35% from below 20% previously.
Last week, Finance Minister Mthuli Ncube reduced the portion of taxes payable in foreign currency in a bid to reduce U.S dollar demand and halt the rapid devaluation of the local currency.
(Reporting by Nelson Banya; Editing by Tomasz Janowski)
