eBusiness Weekly
Government on Tuesday raised concern over continued price hikes by retailers that have seen prices of most basic goods go up by more than 50 percent in the past month. The increases, experts have noted, have further moved basic goods, which were already expensive, out of reach of many as salaries for the majority of the country’s workforce have largely remained unchanged.
Information, Media and Broadcasting Services Minister, Monica Mutsvangwa said Cabinet had noted with concern the increasing basic commodity prices.
“Cabinet raised concern over the tendency by suppliers of goods and services to increase prices, citing movements in the exchange rate,” she said at a post Cabinet media briefing. It was pointed out that the correct approach is to predicate price increases on inflation trends.”
Zimbabwe’s inflation, at 59,39 percent as at the end of March, has also been going up in recent months. But retailers base their pricing on the movement of the parallel market exchange rate.
A 2kg packet of sugar for example is now costing up to $6, up from around $4,50; cooking oil has shot above the $10 mark from around $8.
Government had hoped the floating of the exchange rate of the local RTGS dollar against the United States dollar would improve access by producers and retailers to cheaper foreign currency which would in turn translate to a slump in prices of goods.
Foreign currency shortage, even on the inter-bank market, have continued which has seen the rate against the US dollar going up to 1:3 from the initial 1:2.5.
This has pushed up the parallel market rate as well to around 1:4.2. — New Ziana.
