CONTRARY to speculation that widespread preference for the US$ is driving its local usage, the Reserve Bank of Zimbabwe Monetary Policy Committee (MPC) has instead pointed to the development of surging foreign currency flows into the economy.

Market speculators recently pointed to the fact that the 70:30 ZW$ and US$ currency mix is being prompted by the general preference of the greenback by locals who are shunning the local currency.

In a recent statement RBZ governor, John Mangudya said the MPC has observed otherwise.

"The MPC also noted that the 70:30 currency mix of the foreign and local currency respectively in the economy was a reflection of the significant foreign currency inflows into the economy during the year 2022 which trend was expected to continue into 2023.

"During the period extending from 1 January 2023 to 15 March 2023 the country received US$1,78 billion in foreign currency, representing an increase of 31,5% compared to US$1,36 billion in the same period in 2022," he said.

The central bank said this was against payments of US$1, 69 billion over the same period in 2023.

The local currency also continued to be widely used in the economy as shown by the RTGS transactions settled during the same period.

In 2022, minerals contributed 60% of the US$11 billion that the country generated as foreign currency receipts; hence the soaring of commodity prices is a welcome development.

Market analysts have since projected that the ongoing firming up of commodity prices on the global stage will further spur Zimbabwe's chances to generate more foreign currency since the nation relies heavily on revenue from minerals.

"In order to enhance the use of the US$ through formal banking channels, the RBZ said it will engage banking institutions to address the current high bank charges on foreign currency deposits," added Mangudya.