Vusumuzi Dube
Judith Phiri , Business Reporter
THE Zimbabwe dollar last week continued to strengthen against the US dollar with major supermarkets reacting to the changes by a considerable reduction of their prices in local currency.
This comes as the Consumer Protection Commission (CPC) has said it will continue monitoring price movements in the country to ensure retailers comply and reduce prices of their goods in line with movements of the exchange rate on the interbank market.
Prices of basic goods rose sharply last month after the Zimbabwe dollar suffered heavy losses on the official exchange market. However, over the last four weeks, the Zimbabwe dollar has been fast regaining its value against the US dollar.
Last Tuesday, the local currency firmed to below ZWL$5 000 for the wholesale foreign currency exchange auction with the retail rate pegged at ZWL$4 998 against US$1 from ZWL$5 251 the previous week.
On Friday, on the wholesale foreign exchange auction for banks, the Zimbabwean dollar further strengthened as the weighted average rate was pegged at ZWL$4 883 against US$1. This is a further indication of the market’s positive response to a series of policy interventions put in place by monetary authorities to mop up excess local currency liquidity.
In turn, most retailers continued to display reduced rates and prices in local currency. Furthermore, rates in the black market have continued to drop to as low as ZW$7 000 to USD1, from as much as ZW$10 000 to USD1 experienced last month.
In an interview, CPC chairman Dr Mthokozisi Nkosi said they will continue to monitor retail price movements to ensure all of them respond to the firming of the local currency.
“Major retail outlets are displaying the reduced rates on a daily basis and giving the consumer payment choices. There has been a slight decrease in local currency prices, averaging five percent against an expected drop of 20 percent to be in line with the movement of the Zimbabwean dollar,” said Dr Nkosi.
He however, said some shops that had been moving with speed to implement price hikes following the depreciation of the Zimbabwean dollar, were somehow not using the same pace in reducing prices as the local currency appreciated.
“For example, in one retail outlet, a 500ml pet Coke was going for US$0,60 before the appreciation of the Zimbabwean dollar. The same product is now going for US$0,77. It appears the increases are meant to compensate for the firming of the local currency, because of the marginal decrease of prices in the Zimbabwean dollar, it is expensive for consumers to pay using US dollar in these shops,” he added.
He said they were soon to engage the business community and sector associations to understand the reasons behind the sudden increase of prices in US dollar terms.
“Where there are no justifications, culprits will be dealt with in accordance with the relevant statutes of the law.”
Meanwhile, the Consumer Protection (General) Regulations, 2023 recently gazetted as Statutory Instrument 124 of 2023, highlights offences in terms of Section 51 of the Consumer Protection Act (Chapter 14:44).
The offences include failure to provide fair value, good quality and safe products to consumers classified as civil penalty Category 5, failure to provide warranty on all goods or services as Category 2 and engaging in any unfair trade practices as Category 5.
Bongani Ndlovu