The Reserve Bank Of Zimbabwe governor John Mangudya has broken his silence on the recent sharp price increases of basic goods which was largely blamed on the plunging of the RTGS dollar rate on the parallel market against the United States Dollar.
Speaking on the sidelines of the Uhuru celebrations at the National Sports Stadium on Thursday, Mangudya said he is expecting the unjustified pricing madness to be normal in the next two months after measures that the central bank will put in place and implement.
“We need to make sure that the economy and pricing stabilises by increasing production and supply of foreign currency market and by so doing the prices will go down and we want this to be achieved in two months,” said Mangudya.
The price increases effectively eroded the marginal cost of living adjustments by both government and the private sector.
The holidays have been gloomy as price of bread and other commodities increased.
A standard loaf of bread now costs ZWL$3,50, up from ZWL$2 following a 50% hike in prices of flour and maize meal by the Grain Millers’ Association of Zimbabwe (GMAZ).
The RTGS$ is trading at 4,9 to the US$ on the parallel market, leaving bakers with no option, but to adjust prices to remain viable.
In his interview on Zimbabwe Broadcasting Corporation (ZBC) television ahead of Uhuru Day, President Emmerson Mnangagwa said the price increases were unjustifiable.
Mnangagwa said that he has no desire to regulate prices but warned businesses they may force the government’s hand to do so.
“With regard to the issue of prices, I made an appeal a few days ago to our compatriots in industry and commerce that prices are coming up but there is no justification in many areas why they are coming up.
“It’s just a question of perception, fear of the unknown that we want to cushion ourselves today for possible challenges tomorrow.
“When we met the majority said we are reducing by half whatever has happened before we can talk about it and the prices went down. That is how we must go.
“We don’t think that is the way we should operate. Last time we had the same phenomenon of prices just being increased and I asked captains of industry to come and meet me here at State House.
“We do not want to go to a situation where the Government is forced to regulate prices,” said Mnangagwa.
Price controls were last implemented in 2007 when inflation was galloping out of control. However, enforcing the Price Control Act resulted in severe shortages of basic goods.
Price controls were last implemented in 2007 when inflation was galloping out of control. However, enforcing the Price Control Act resulted in severe shortages of basic goods.
