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RBZ hails mining sector for 78% Forex contributions

RBZ hails mining sector for 78% Forex contributions

John Mangudya

The Reserve Bank of Zimbabwe (RBZ) has hailed the mining sector for contributing 78% out of the total foreign currency injections amid calls for the public to exercise discipline in avoiding exchange rate volatility.

Vongai Mbara

Addressing delegates at a function to launch the Mining Industry Report last week, RBZ governor, John Mangudya said the foreign currency realised through retention was significant.

“From January 25 to October 2021 stood at 78 %. During the period, US$3,4 billion in total was earned, out of which US$1,37 billion was surrendered through the 40% export surrender thresholds. We would like to appreciate miners for doing a good job,” he said.

The top five earners after retention threshold deductions during the period were Platinum at US$703 million, Gold US$147,9 million, Ferro Chrome US$105 million, diamonds US$45 million, and Coke US$23,6 million.

Quizzed by delegates on what the central bank is doing to close the gap between the two exchange rates, Mangudya said the problem bedeviling the economy has more to do with discipline.

He said all the countries have a gap between the official and parallel market exchange rates and underscored the need for consistency.

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“For the past three weeks, the challenge has been the problem of the volatility of the parallel market rates. If the parallel market rate is at US$1: $140 and because of indiscipline some entities decide to increase the exchange rate to US$1 :$200 it will cause volatility.

“If the parallel markets remain stable, it means prices will remain stable, the volatility in the parallel exchange markets is often confused with the gap between the two exchange rates. In countries like Nigeria and Malawi, there are huge gaps between the two exchange rates. So we need to understand why we have such volatility in the markets,” he said.

He challenged business leaders to instill good corporate governance realising that the use of foreign currency in this economy alongside the local currency is a privilege that requires discipline and maturity.

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