Prices of goods and services continue to tumble as the new measures to adopt a local currency begin to tame runaway speculative activities and upward movements of the parallel market exchanges rates that had become rampant in the economy.
There are expectations that there will be continued pressure for prices to come down as Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said yesterday the central bank would move in to support bureaux de change so that they can operate efficiently and effectively.
On Monday Government removed the multi-currency regime and restricted domestic transactions to local currency.
Under the multi-currency regime, which had made US dollar the de facto currency of exchange in local transactions, most retailers and service providers were increasingly adjusting their prices in tandem with parallel market exchange rates.
However, for the first time since the currency reforms began on October 1 last year, the interbank rate, at 1:8 at some banks, was more than the parallel market exchange rates, which hovered between 1:7 and 1:7,5 for electronic transactions.
But for cash transactions, parallel market rates – trading between 1:6 and 1:6,5 – were considerably lower.
Prices fell as a result.
A survey by The Sunday Mail showed that cooking oil prices, which breached the $20 price for a 2-litre bottle, was retailing between $16 and $18 at several outlets yesterday.
The price of a 2-kg bag of flour had also slipped to between $11 and $12 from the previous range of $15 to $30.
A 2-kg bag of rice was selling between $10,50 and $11, representing a downward revision from top prices of $24.
Also, prices of a 1kg packet of washing powder had dived to $20 from between $34 and $38.
Regaining Control
RBZ Governor Dr John Mangudya said compliance with the new mono-currency regime was encouraging, as more people were transacting in local currency.
“The market has reacted positively to the recent currency reforms implemented by Government. We have seen people now paying in the local currency. What it means is that we are now going to conserve foreign currency, it also means we are going to be a competitive country,” said Dr Mangudya.State media
