The local currency, which was reintroduced in 2019 after a
decade of multicurrency system, is trading at a 100% premium on the parallel
market where it is pegged at between $2 100 and $2 200 to the greenback; and
US$1 036 on the official market.
An alarmed government urged the nation to be calm in
response to the sharp decline of the Zimdollar with Vice-President Constantino
Chiwenga telling participants at the Zimbabwe International Trade Fair
International Business Conference in Bulawayo on Wednesday that authorities
were putting measures in place to maintain exchange rate stability.
“The transitory exchange rate volatility in the parallel
market witnessed in the economy for March this year is merely a reflection of
the store of value demand for foreign currency,” Chiwenga said.
“Bold measures are being implemented by government to
foster price and exchange rate stability in the economy.
“These measures include tight monetary and fiscal policy,
insistence on value for money for government procurement and effective monetary
and surveillance by the Financial Intelligence Unit.”
Some consumers told NewsDay that retailers had put a
moratorium on how much stock customers could buy with the Zimdollar.
It was the same with other products such as cooking oil,
meat and mealie-meal, including beverages at some retail shops in the capital
where retailers in the capital and other major cities were selling selected
goods excusively in US dollars.
“They are paying us in local currency but they are not
accepting it at shops. It’s really sad,” a consumer told NewsDay.
An official at one of the country’s leading meat suppliers
yesterday confirmed the limitations placed on consumers, but said this was to
ward off unscrupulous businesspeople seeking arbitrage.
“There are some businesses trying to take advantage of the
fact that we are selling in local currency to come a dump their Zimdollar stock
and then sell the meat or merchandise they buy from us in US dollars.
“This has become prevalent, so to dissuade this practice we
are limiting stocks on certain products,” said the official who spoke on
condition of anonymity.
Some large retailers were also forward pricing, saying that
the local currency was on a free fall and they were hedging to avoid possible
exchange rate losses.
Others simply restricted purchases to two units on some
products.Some of the products whose stocks are being limited included cooking
oil and rice.
Finance deputy minister Clemence Chiduwa said the FIU was
monitoring developments in the retail sector.
“We are getting
reports that some supermarkets are demanding payment for certain products
exclusively in US dollars,” Chiduwa said.
“The laws on Bank Use and Promotion Act apply the same way
as trading in the parallel market.
“This is illegal and all operators are urged to abide by
the laws. We are closely monitoring the market delinquency and deviance which
is a violation of the law.
“The FIU is taking appropriate action against those who are
exclusively accepting USD on certain products.”
He, however, acknowledged that the Zimdollar was losing
value.
“The continued depreciation of the Zimdollar is due to
inflationary expectations mainly driven by parallel market rates.The resultant
instability due to chasing rates is negatively affecting all of us. Market
players should focus on production and the generation of forex,” Chiduwa added.
Consumer Council of Zimbabwe (CCZ) executive director
Rosemary Mpofu urged retailers to abide by the country’s laws.
“We note with great concern as CCZ, a consumer advocacy
body, that some retail shops are selling and displaying some selected products
selling exclusively in foreign currency namely the US dollar, contravening
exchange control regulations that all products should be sold using a basket of
currencies including Zimdollar, which is legal tender,” Mpofu said.
“We urge such errant businesses to abide by the laws of the
country as that move impacts on consumers spending and preferred choice of
currency use.We urge the FIU to rein in such retailers, urging consumers to
report such shops.”
Delta Beverages spokesperson Patricia Murambinda, told
NewsDay that they were not responsible for the actions by retailers in charging
their products exclusively in US dollars.
“The retailer will be the best person to respond to your
inquiry as individual outlet product pricing is their ultimate responsibility,”
Murambinda said.
The local currency, reintroduced in 2019, has taken a huge
beating in recent days, pushing up the cost of basics and services beyond reach
of many.
On Tuesday, the Zimbabwe National Statistics Agency
(Zimstat) said the country’s food inflation remains high, and kept on rising as
the local currency keeps losing value.
According to Zimstat, food poverty line (FPL) and total
consumption poverty line (TCPL) is now $25 170 and $33 044 per person
respectively.
Last month, FPL stood at $22 560 while TCPL was at $29 778.
ZimStat director-general Taguma Mahonde while presenting a
report on poverty datum lines said: “The food poverty line (FPL) represents the
amount of money that an individual requires to afford a daily minimum energy
intake of 2100.
“The consumer price indices (CPI) was 280,48 in April 2023,
274,01 in March 2023 and 160,13 in April 2022.
“The CPI for housing, water, electricity, gas and other
fuels had the highest month-on-month inflation rate of 7,9% followed by health
at 4,%.
“The year-on-year inflation rate (annual percentage change)
for the month of April 2023 as measured by all the items CPI was at 75,2%.”
Mahonde said the month-on-month inflation rate also
increased by 2,3% cent.
“The month-on-month inflation rate in April 2023 was 2,4% gaining
2,3 percentage points on the March 2023 rate of 0,1%.
“The month-on-month inflation rate is given by the
percentage change in the index of the relevant month compared with the index of
the previous month.”
Economist Prosper Chitambara said there has been too much
liquidity of the Zimbabwe dollar on the market, pushing the exchange rate up.
“It is really about Zimbabwe dollar money supply that’s
what always causes the local currency to depreciate,” Chitambara said.
“Liquidity has been increasing with government payments or
salary increments.”
Citizens Coalition for Change spokesperson Fadzayi Mahere
told NewsDay that ‘the galloping black market rate comes against a background
of gold smuggling, grand looting and State capture by the elite mafia.’
“A CCC government will offer a break from the present
predatory order and a bridge that will accelerate transformation and make
Zimbabwe a stable, democratic and development-focused, modern nation,” Mahere
said.
“We will reshape Zimbabwe through the creation of a shared
vision and a sustainable transitional framework that will be the foundation of
transforming the structure of our economy,eliminating poverty and enabling the
pursuit of sustained, equitable and shared growth.” Newsday
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