The RBZ Governor, Dr John Mangudya, held a no-holds-barred
meeting with manufacturers, retailers and other business leaders to address
issues related to price instability and volatility of the local currency
against the US dollar.
The meeting, which marked the first deliberations between
the RBZ and business leaders in 2022, saw all parties agreeing to protect
consumers by doing away with wanton increases of basic goods and services. Some
retailers, including major shops, are pegging their prices against the parallel
market, where the rate of the US dollar to the local currency has slid to over
$200 to US$1. On the official RBZ auction rate, the exchange rate is pegged at
$112 Zim dollars (ZW$) to US$1.
In an interview on Friday, Dr Mangudya said the meeting
with manufacturers and retailers was a follow up to the October 2021
deliberations last held by the parties. Dr Mangudya said one of the major
outcomes of the meeting was the agreement by all parties to adopt measures that
will increase the demand of the local currency. It is envisaged that increasing
the demand for the local currency will ease demand for the US dollar, thus
curtailing the plummeting of the ZW$ against the greenback on the parallel market.
“There seems to be a preference to hold on to the USD by
citizens as a medium of exchange. This has led to currency volatility so
Government is coming up with a number of measures that are meant to increase
demand for the currency so that it increases its value. In the meeting we also
agreed that there is a need for moral suasion in the country.
“In the banks we have noticed that 66 percent of the total
money in the banking system is local currency. Even the duty revenue from ZIMRA
is about 30 percent local currency. This is a positive sign, so we are going to
increase demand and ensure that the value increases as well.”
Among other outcomes, the meeting underscored the need to
maintain the macroeconomic stability which has prevailed over the past 12 months.
Dr Mangudya also said the impact of Government’s policy
measures to promote local industries were beginning to bear fruit with the
country witnessing an increase in locally manufactured goods.
“The meeting with the business community was a continuation
of the last meeting we had in October. The parties underscored the need to
maintain the macroeconomic stability momentum experienced. We also discussed
how to increase locally manufactured goods.
Locally manufactured goods have increased to between 82 -85
percent in major supermarkets which is a positive sign. Exports are also on the
increase which means our strategies are working. So the meeting was on the
various strategies to be used to tackle inflation and ensure price stability.”
Dr Mangudya also said RBZ was continuing its investigations
against currency manipulators, with the culprits set to face the music. Some
businesses have been manipulating the currency by setting their Zimbabwe dollar
prices to black market exchange rates, with some shops pricing their goods and
services using illegal rates ranging from US$1: $180 to US$ 1: $210.
Confederation of Zimbabwe Retailers (CZR) president Denford
Mutashu described the meeting as fruitful as the deliberations had focused on
mechanisms that were being put in place to ensure that prices remain stable. Sunday
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