HomeBusinessInterbank market records US$2,9m deficit in November

Interbank market records US$2,9m deficit in November

Paul Nyakazeya

THE interbank foreign currency market recorded a deficit of US$2,9 million in November, from a surplus of $75 425 in October, due to declining inflows thr

ough the official market as offshore holders of foreign currency began channeling their funds through the parallel market after the closure of money transfer agencies

Several MTAs have regained their licences which were withdrawn by the central bank in October.

Figures obtained by businessdigest indicated that foreign currency supplies to the interbank market fell 4% to US$14,6 million in November against an October decline of 10%, partly reflecting the constrained inflows of hard currency into the official market.

“The demand at the currency market, which declined by 15% in October, rose 9% to US$14,8 million last month although it could not be satisfied resulting in a monthly deficit of US$2,941 million,” the central bank said in a statement accompanying its statistics.

“In October, the interbank foreign currency market reported a surplus of US$75 400 while in September surpluses averaged US$45 000,” the central bank said.

The highest daily purchases and sales of US$1 353 499 and US$1 322 107 were recorded on November 10. A peak surplus of US$234 172 was recorded on November 7, against a peak deficit of US$148 056 on November 16.

Analysts said the re-licensing of some MTAs was expected to prop up foreign currency inflows this month. The Reserve Bank last week re-registered seven MTAs which were among 16 operators closed for alleged non-performance and “deviant behaviour”.

The seven MTAs are Stanbic Bank, NMB Bank, Fredex Financial Services and CFX whose international partner is Western Union. Barnfords, whose international partner is Travelex, was also given an operating licence. The other MTAs are Pacific which is in partnership with UK Money Services and Zimpost whose foreign partners are South African Postal Services and Botswana Post.

Sources said the Reserve Bank was still assessing applications by other money transfer agencies.

Interbank foreign currency trade volumes declined by 12% in October after the Reserve Bank of Zimbabwe closed MTAs.

Meanwhile, the Zimbabwe dollar depreciated by an average 2% against the British pound and the Japanese yen between October and November and lost 3% against the rand, euro and pula.

However, the local unit recovered from October losses against the Malawi and Zambian currencies after appreciating by 2% and 6% respectively in November. In October, the local currency fell against major currencies, slipping an average 2% against the rand, pula, yen, and British pound.

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