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Forex accounts are safe, secure, says Dr Mangudya

THE Reserve Bank of Zimbabwe has reassured holders of free funds that their funds are safe and secure in Zimbabwe as the bank has no appetite to temper with the legal status of the public's foreign currency accounts.

Presenting the 2020 monetary policy statement this, Monday, Reserve Bank of Zimbabwe Governor Dr John Mangudya expressed optimism that the economy will register positive growth on the back of strong monetary policy measures.

"The use of free funds has always been allowed since time immemorial, it has remained virtually unchanged. The unfettered or unrestrained use of free funds is in line with regional and international best practice as free funds are outside the exchange control territory of the country. Free funds play a catalytic role in enhancing confidence in the foreign exchange market and in promoting economic development. They constitute around 30 percent of Zimbabwe's total export receipts," he said.

Free funds are made up of diaspora remittances, funds remitted into the country by international organizations, embassies, non-governmental organisations, donations and any other funds realised by individuals from offshore activities.

Dr Mangudya said the economy will grow by 3 percent owing to an increase in prices of minerals as well as the agricultural season considering rains received in most parts of the country a few weeks ago.

"The bank is positive about the outlook of the Zimbabwean economy which is expected to grow by 3 percent this year on account of increased international prices of key minerals produced locally namely platinum and palladium and coupled by stable foreign exchange generation capacity of the economy. The bank is confident that this year's agricultural outturn will be much better than initially anticipated due to improved rains we received in January and February in most parts of the country," he said.

Mangudya said monetary discipline is critical in stabilizing prices which will also help the economy's year-on-year inflation figures coming down to around 50 percent by December.

"We are confident that the bank's mix whose key ingredients are monetary discipline and efficient exchange market will be effective in stabilising consumer prices and the exchange rate. The stable exchange rate, is then set to anchor the country's disinflation programme through which monthly inflation is forecast to close the first quarter in single-digit levels of below 5 percent. This trend would see year-on-year inflation coming down to around 50 percent by December 2020," he said.

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