The impact of USD- rand exchange rate on remmittance to Zimbabwe (2008-2015)

Abstract

Remittances are emerging as a stable source of foreign capital inflow in Zimbabwe. Much of the remittances are coming from South Africa. The study sought to explore the impact of US$-Rand exchange rate on remittances to Zimbabwe. Estimation of regression results was done using Ordinary Least Squares (OLS), using data sample spanning from 2008 to 2015. The findings show that depreciation of the rand value has a negative impact on remittances. This suggests that a depreciation in the rand value results in low remittances flowing into Zimbabwe. The findings support the theory of enlightened self-interest. Given that the Zimbabwe diaspora community is enlightened, the study recommends for the need to put in place a conducive business environment that will attract remittances even when the rand depreciates