THE continuous decline of the exchange rate has come as a great relief to consumers bringing hope that prices for basic commodities will follow the same trajectory.
Following the recent macro-economic policies, which were put in place by the Government in May, the Zimbabwean dollar has been steadily regaining its value.
At the wholesale forex exchange auction held on Thursday, the local dollar was pegged at US$1: $5 739 from US$
The Zimbabwean dollar has been steadily regaining its value.
Expectations are that the exchange rate (official and parallel market), which recently took a battering from the negative impact of excess liquidity in the market, will strengthen in favour of the local currency going forward.
Since the introduction of the wholesale auction, financial institutions have been struggling to raise Zimbabwe dollar funding enough to buy more than US$1 million at any given time.
The general public has been struggling to access enough local currency to pay various bills, a development that will create demand for local currency hence regaining its value.
Consumer Council of Zimbabwe Matabeleland regional manager Mr Comfort Muchekeza urged businesses to follow the exchange rate trend and reduce the prices of basic commodities.
“This is a very positive change, we hope this will result in prices matching the new exchange rate.
“The challenge we have is that when the rates go up the business community is quick to review prices upwards, but when it goes down, they take their time, that is if ever they make downward reviews,” said Mr Muchekeza.
“As of now, we are yet to see prices going down, we call upon all those in business to pass on to the consumers the benefits derived from the declining exchange rate.”
There has been widespread consumer outcry over the spate of ridiculous speculative price increases, which was experienced in recent months driven by wild parallel market rates.
The exchange instability prompted the Government to adopt a raft of interventions geared at stabilising the economy by consolidating the fiscal and monetary policy gains achieved so far under the Second Republic as well as preserving the consumer purchasing power as many consumers are being paid salaries in local currency.
Among the top measures to restore stability is the suspension of duty on the importation of basic goods, 100 percent retention on domestic sales in foreign currency starting this month and fine-tuning the Foreign Exchange Auction System, among others.
Chronicle
