By A Correspondent- Retailers have defied President Emmerson Mnangagwa’s directive to adhere to the official interbank rate when pricing goods.
On Saturday, Mnangagwa announced a raft of measures aimed at controlling the spiralling inflation, which included a directive to retailers to stick to the official interbank rate of $280 to avoid price distortions.
The United States dollar is trading at $165,9 against the local currency at the official foreign auction system, but is going for around $280 at the interbank rate and $400 on the black market.
Mnangagwa said: “The willing-buyer willing-seller interbank foreign currency arrangement has assisted in the price discovery mechanisms of the exchange rate in the economy. In this regard, retailers and wholesalers are, with immediate effect, allowed to benchmark their pricing to the average interbank rate with a maximum allowable variance of 10%. The security agents of government and the Financial Intelligence Unit shall with immediate effect enhance their roles to effectively monitor financial transactions in order to address the delinquent arbitrage behaviour in the economy.”
However, a snap survey conducted by NewsDay yesterday revealed that most retailers had adopted the black market rates of between $350 and $400 in pricing goods and services, totally disregarding Mnangagwa’s directive.
For instance, bread which is pegged at $450 a loaf was being alternatively charged between US$1 and US$1,40, which is way above the interbank exchange rate. Cooking oil was pegged at around $1 600 for 2 litres, but a consumer could pay US$4 showing a 1:400 exchange rate to the dollar.
Some retailers described the inflated exchange rate as US dollar discounts whereby customers are charged less for paying using the US dollar to boost foreign currency sales.
In interviews with the NewsDay, retailers said the official auction and interbank rates were not sustainable because they could not meet the costs of running their businesses if they adhered to the official exchange rates.
“It is very unprofitable to continue using the official exchange rate,” said one retailer who spoke on condition of anonymity.
“The interbank and auction rates are always lower than the parallel market rate. If we stick to the interbank rate, consumers who want to spend the US dollar will first go to the black market and sell their money at a higher rate, then come and use the local currency. We will not be able to get foreign currency, which is, however, very important for us to get supplies of some goods and services,” he added.
Economist Trust Chikohora said: “The measures that were introduced by the President are commendable, but one wonders how the auction rate will be determined.
There is need for a currency indaba to deliberate on the measures that have been put in place so that we come up with holistic and sustainable solutions to address the currency crisis.
There is need to share ideas on currency issues, which has a direct bearing to the pricing situation, the prevailing inflationary situation and economic growth.”