RBZ moves to stabilise prices

PANIC-buying amid price hikes of basic commodities peaked at the weekend in response to the Reserve Bank of Zimbabwe (RBZ)’s monetary policy statement, which economists argued failed to stem public distrust in government’s financial management systems.

BY BLESSED MHLANGA

RBZ governor John Mangudya, in a statement yesterday, said the central bank had started initiating the price stabilisation plan by drawing down on the $500 million lines of credit aimed at bringing sanity to the economy.

“The bank has noted that increase of prices of certain goods has followed the spike in foreign currency parallel market rates, which is being caused by some people bent on duping the public of their hard-earned income,” Mangudya said.

“The opportunists are manipulating foreign currency parallel market rates to cause unnecessary panic and despondency and destabilisation of the economy. Such counter-productive behaviour is unwarranted and should be condemned by all peace-loving Zimbabweans.”

The hikes, which saw the price of a 2-litre bottle of cooking oil jumping from $2,85 to about $10, were triggered by the US dollar premium on the black market, which spiked to 165% from 120% last Monday, according to traders.

Mangudya indicated that the $500 million credit facility, which will be used to procure essential commodities, could keep prices low.

“As advised, the purpose of the facilities is to fund the procurement of essential commodities including fuel, electricity, wheat and raw materials for the manufacturing of cooking oil and packaging,” he said.

“In view of these positive developments, the bank would like to assure the public that there is sufficient fuel available in the country and, therefore, there is no need for panic-buying of fuel and other essential commodities.”

Confederation of Retailers’ Association president Denford Mutashu said they were working with government and industry to stabilise the prices and ensure they were brought down.

“Basically, it’s a supply side issue. Retailers do not increase prices if the supplier does not increase, and also it’s an issue of access to foreign currency, which is now found on the black market given that most products on the shelves are imported.

We are engaging government for access to foreign currency,” he said.

Confederation of Zimbabwe Industries president Sifelani Jabangwe, however, said the measures would not curb price hikes since not all businesses were being allocated foreign currency.

He expressed fear that the black market would continue to drive the exchange rate, forcing prices to “shoot through the roof”.

“Not all businesses are getting foreign currency from the RBZ, this was being prioritised for those producing the basic commodities.

Everyone else has to go and fend for themselves, so the government is essentially turning a blind eye, where people go to the black market and again, we are saying this is not sustainable,” Jabangwe said.

“There is now an exchange rate between the US dollar, the bond note and the RTGS [real time gross settlement] and the US dollar. This is what is now driving significant price hikes on the market, except those basic commodities.”

The price hikes were triggered by fears that the RBZ was seeking to reintroduce the Zimdollar through the backdoor after it announced the separation of US dollar foreign currency accounts (FCAs) from RTGS FCAs, but Mangudya yesterday dismissed the fears as unfounded.

“The bank would like to reassure the public that the multi-currency system will remain in use and the bank shall continue to secure lines of credit to supplement the country’s foreign currency earnings from exports and diaspora remittances in order to support the entire economy,” he said.

Mangudya said the separation of nostro accounts from RTGS accounts did not mean that those with RTGS accounts would not have access to US dollars.

“What we are saying is that those with FCA accounts will not have to wait in the queue to access the US dollars.

This will encourage people to bank their hard currency.

Those with RTGS accounts will just have to wait in the queue to access the money at 1:1 with the US dollar,” he said.

Mangudya, who is out of the country seeking new lines of credit and foreign currency support, said the RBZ had already paid $40 million to buy fuel.

“The bank released US$40 million for the procurement of fuel on Friday, October 5, 2018 and the fuel is currently being supplied and delivered to the various filling stations and supply points across the market,” he said.

“The bank is grateful to the National Oil Company of Zimbabwe for working round the clock to ensure that the fuel is delivered to the oil marketing companies across the country.”

Mangudya also warned illegal foreign currency dealers against manipulating the currency on the parallel market and forcing price hikes for speculative reasons, saying such actions were counterproductive.

18 Comments

  1. Why is the governor out of the country? I thought these are the extravagant trips that Ncube said should be reduced? I think he must be fired for incompetence. His docile threats to black marketers doesn’t scare anyone even a child. Instead citizens expect leadership that makes bold, concrete and progressive, quantifiable and timely measures.

  2. Wonder whether any sane person would bank their us$.Asking a hyena to keep your meat.

    1. It makes you wonder what the ED-pfee craze was all about.. In a way Zimbabweans deserve this they keep on voting stupid corrupt bastards into power. If Chamisa was in power the country would not be like this

  3. Sufferer

    Why refurbish a railway system and allow the person on life saving drugs to suffer when the money fir refurbishment could be used to import the drugs needed

  4. This country , & especially Harare, has many idiots of the highest order. If you think Chamisa’s face could save Zimbabwe’s economy, you are irredeemably stupid. The economy needs measures like those taken Minister Ncube. Sane people will know that Ncube cannot be expected to resuscitate Zimbabwe’s ailing economy in one day. Kuti Chamisa akakumbira masanctions akakuvadza nyika atonge nyika is like asking the witch to treat his victim. Over our dead bodies! He will never , ever, ever rule Zimbabwe! Some of the commentators lack knowledge of basic economics, that’s why a trip to negotiate lines of credit is a luxury trip for them. Manje chero mukanamata kuna Baal kuti zvishate, naMwari zvichanaka. We pray for Professor Ncube’s success ! We pray for ED’s success. Their success will end our problems while their failure will affect all ordinary people like me. ED , Ncube & the barbaric individuals at Harvest House will continue to eat well. I refuse to fight Chamisa’s primitive wars!

    It’s refreshing one MDC goon finally admitted in a comment above that ED was voted. That’s what gives him legitimacy as President of Zimbabwe , not the acceptance of results by a profoundly stupid losing candidate.

    The earlier you stop that bitterness over your patently unqualified losing & realize that ED will be President of all of us until 2023 the better. To criticise you just need a mouth but you need brains to change things.

  5. This country , & especially Harare, has many idiots of the highest order. If you think Chamisa’s face could save Zimbabwe’s economy, you are irredeemably stupid. The economy needs measures like those taken by Minister Ncube. Sane people will know that Ncube cannot be expected to resuscitate Zimbabwe’s ailing economy in one day. Kuti Chamisa akakumbira masanctions akakuvadza nyika atonge nyika is like asking the witch to treat his victim. Over our dead bodies! He will never , ever, ever rule Zimbabwe! Some of the commentators lack knowledge of basic economics, that’s why a trip to negotiate lines of credit is a luxury trip for them. Manje chero mukanamata kuna Baal kuti zvishate, naMwari zvichanaka. We pray for Professor Ncube’s success ! We pray for ED’s success. Their success will end our problems while their failure will affect all ordinary people like me. ED , Ncube & the barbaric individuals at Harvest House will continue to eat well. I refuse to fight Chamisa’s primitive wars!

    It’s refreshing one MDC goon finally admitted in a comment above that ED was voted. That’s what gives him legitimacy as President of Zimbabwe , not the acceptance of results by a profoundly stupid losing candidate.

    The earlier you stop that bitterness over your patently unqualified losing “him Chete chete man” & realize that ED will be President of all of us until 2023 the better. To criticise you just need a mouth but you need brains to change things. Contribute meaningfully to the development of the country beyond just bad-mouthing those who try.

  6. Comment…hanzi tirikutonga vanhu vachitambura kudai shuwa wakafa arinani akazorora ZANU PF yatadza

  7. Comment…hanzi tirikutonga vanhu vachitambura kudai vakafa vakazorora shuwa ZANU yatadza

  8. Comment…vakafa vakazorora shuwa Zanu yakoniwa

  9. Maiwe vanamusoni urimunyika ipi iwe kuuraiwa brain ne zanu kutotadza kana kufunga dununu remunhu

    1. Haaa pakaoma. Kutaurawo according to what they know and understand.

  10. HEY PAIPA

  11. Comment…Very intelligent analysis Musoni. If in place of “idiocy” yu could find more suitable description of the popular demand for long overdue DEMOCRATIC CHANGE, and the TOO FAMILIAR tragic consequencies. Otherwise yo noted tragic description needlessly misses wisdom target and too easily backfires.

  12. Well chronicled analysis musoni. If the megalomaniac Chamisa rushed to plead for sanctions anticipating to use them as ransome people now want to blame the voted government. ED, Mthuli Ncube and others are doing their best whilst others are busy throwing spanners into the mechanism for solving economic problems.

    Spanners or no spanners victory will be certain. Handiti ndiro jecha musadza remaichemera.

  13. Forty years of decisive rural vote with impresive consistency of consequences. Exhibitions of rural wisdom OR consequences of stifled urban wisdom. No matters arising. Q.E.D.

  14. Dwayne Williams

    You are warning people who are already engaged in illegal activity to be lenient in their activities. That’s laughable! It’s like asking muggers to please leave their victims with transport money. Why aren’t you arresting a single one of them? why are you so afraid of them?

  15. Mo Fire, the land is the economy and the economy is the land. Ncube is going overseas to force the Americans to give us money as the above party members say. Do you think that Chamisa can force them. Aiwa he cant as he does not have Gen Chiwenga behind him to scare the Amerticans. Dont worry comrades we will soon all be driving Mercedes Benz underf the glorious leadership of the party. A loota continua.

  16. Comment…VaMangudya, mari dziri mumigwagwa BOND nehuwandu hwawo irikubuda seyi mumabhanga iye isu tichibvumidzwa kutora $30 chete? Nhasi @ 16:50 ndaona vanotengesa mari vachisungwa paCopacabana. Chokwadi hazvibatsiri kusunga arikutengesa muchirega kusunga bhanga ririkuburitsa mari. Mungaita zvipi nezvipi, musina kuti mabhanga
    aite zviri pamutemo apana chinobuda zvachose.

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