Online Reporter
Rutendo Nyeve, [email protected]
THE Reserve Bank of Zimbabwe (RBZ) has raised concern over what it describes as unjustified increases in the prices of basic commodities, singling out bread as an example of price adjustments not supported by economic fundamentals.
The concerns were expressed by RBZ Deputy Governor Innocent Matshe while addressing delegates at the Insurance and Pensions Symposium in Victoria Falls on Thursday.
Dr Matshe said some economic players were exaggerating price movements, particularly in response to external shocks such as recent fuel price increases linked to geopolitical tensions in the Middle East.
“I will give you an example, bread. I am told that bread has risen to US$1.10 a standard loaf of bread. And I am asking, what does the $0.10 stand for? It is not related to the percentage contribution of transportation because it does not contribute 25 percent, or nowhere near 20 percent,” he said.
He argued that the price hikes are largely driven by perception rather than actual cost pressures.
“So you can see that people really have exaggerated the movement in the price of fuel. While Government is making efforts to contain fuel price increases, there is a tendency to jack up prices in an exaggerated manner,” said Dr Matshe.
He commended Government’s interventions aimed at cushioning consumers against rising fuel costs but stressed the need for businesses to act responsibly.
Dr Matshe reaffirmed the central bank’s commitment to maintaining macroeconomic stability, which he said is critical for building investor confidence and supporting long-term economic growth.
He noted that Zimbabwe’s inflation has significantly declined, with monthly inflation now below four percent, urging businesses to align pricing models with the prevailing stable environment.
