Chronicle Editor
Most basic commodities are now beyond the reach of many consumers because businesses are constantly increasing the prices chasing the black market rates. Government should urgently intervene and stop this price hike madness that is causing the suffering of ordinary people.
Last week the Reserve Bank of Zimbabwe (RBZ) had to intervene to curtail resurgent price increases in the economy and stabilise the volatile parallel market exchange rate.
The bank’s Monetary Policy Committee (MPC) significantly increased key interest rates and further cut down the quarter target for money supply growth.
The committee reviewed upwards the Bank Policy rate from 60 percent to 80 percent as well as the Medium-Term Bank Accommodation Facility interest rate from 40 percent to 50 percent.
The RBZ has maintained that the widening of the mismatch between the official exchange rate and the black market rate is not due to weak fundamentals but black-market activities.
This has been supported by economist and former legislator Mr Eddie Cross who said the resurgent inflationary pressures being experienced in the market are unjustified given that all the economic fundamentals for a sound economy are in place.
“There is no reason for this inflation in Zimbabwe given that all economic fundamentals are solid,” said Mr Cross.
Many businesses are now pegging prices based on the black market rates hence the constant price hikes consumers are being subjected to. Mr Cross who was once a member of the MPC, said Zimbabwe’s economic problems are unique as they are created by Zimbabweans themselves.
In a bid to control the black market activities, the RBZ last year banned 30 black market currency dealers from operating any bank or mobile money accounts for two years.
The central bank’s Financial Intelligence Unit (FIU) instructed banks, mobile money operators and other financial services providers to identify and freeze accounts operated by the dealers and bar them from accessing financial services for two years.
What is clear is that the economic problems we are facing which is causing the suffering of ordinary people is as a result of our own making.
There is therefore a need for discipline in the market place. The RBZ should continue to identify individuals and organisations involved in parallel exchange market activities in order to benefit from foreign exchange arbitrage and punish the culprits.
Businesses on their part should stop pegging prices based on the black market. We have said before that those illegally dealing in forex or pegging prices based on black market rates are economic saboteurs who deserve severe punishment.
The Zimbabwean dollar had stabilised but of late consumers have been subjected to incessant price hikes by unscrupulous businesses that are pegging prices based on the parallel market rates.
There is urgent need to put a stop to this before we slide back to those dark days when prices of most commodities were being increased daily.
Online Reporter