In his monetary policy of 2023, Reserve Bank of Zimbabwe (RBZ) Governor Dr. John Mangudya said bank deposits grew exponentially driven by increased use of USDs in the economy.
Banking loans and advances increased by 114,46 percent from $603,14 billion in June to $1,29 trillion as at December 31, 2022.
Dr. Mangudya said, “Total deposits increased by 103,57 percent from $1,12 trillion as at June 30, 2022 to $2,28 trillion as at December 31, 2022 mainly driven by growth in foreign currency deposits.”
According to the Bank, commercial banking sub-sector deposits constituted 91,15 percent of total banking sector deposits. Foreign currency deposits accounted for 64,24 percent of total deposits as at December 31, 2022.
“The average prudential liquidity ratio was 59,50 percent as at December 31, 2022, largely reflecting high stock of liquid assets in the sector,” the Governor said.
Increased foreign currency account (FCA) balances in the banking system and aid in the form of external credit lines have enabled USD denominated business for the sector and as such 78,2 percent of loans were foreign currency denominated to December 2022.
In terms of bank charges, the central bank said the pricing model agreed between the Bank and Bankers Association of Zimbabwe (BAZ) in May 2022, will continue to guide the review of transactional charges and service fees.
“Banking institutions are urged to maintain a balance between business viability and the provision of affordable and accessible products and services in the spirit of promoting financial inclusion and the use of electronic means of payments,” said Dr. Mangudya.
The central bank said it shall continue to monitor the terms and conditions of business activities to ensure adherence to fair business practices and reasonable pricing in line with the Banking Act, and the Consumer Protection Framework – Harare