The Sunday News
Bruce Ndlovu, Sunday News Reporter
THE Reserve Bank of Zimbabwe (RBZ) is working on a Statutory Instrument (SI) to ensure that prices in local currency are quoted using the prevailing rate on country’s foreign currency auction system, a member of the RBZ Monetary Policy Committee has said.
In order to give the true value of the local currency against the US dollar, the country recently adopted the foreign currency exchange system, abandoning the fixed interbank exchange rate system.
Yesterday, the local currency eased slightly by 3.2 percent to $65.80 from $63.74 in the third weekly auction run. Last week’s rate was on the back of a slide from $57.36 in the first week.
In a conversation with The Permanent Secretary in the Ministry of Information, Publicity and Broadcasting Services Mr Nick Mangwana, top economist and RBZ Monetary Policy Committee Professor Ashok Chakravati said it was the monetary authority’s desire to see a double tier pricing system, with retailers listing prices that followed the prevailing auction rate.
“We want to regularise the relationship between US Dollar pricing and RTGS pricing. The idea is that when you’re in retail or in any shop, a good is priced let us say at US$1, then the RTGS should, by law, be the equivalent based on the exchange rate. So, let us say a good is US$1, then the market exchange rate is 63, then it should be ZW$63 as well. Currently the consumer is suffering because there’s no universality on the exchange rate being used. People are getting foreign exchange now so they must use the market exchange rate to convert the goods into RTGS,” he said.
This, Professor Chakravati said, was part of the dedollarisation process but would not last forever. He added that a SI to make sure that retailers followed the prevailing rate was in the RBZ’s plans.
“No, it is not going to a permanent feature, it is part of the dedollarisation process. At the same time, we do recognise that it’s a process, there are US dollars in the economy and we do not want to make the use of the US dollars illegal. We want them to circulate but there must be a normal market relationship between the US dollar and our national currency. So, the idea is to bring forward Statutory Instrument which requires that all prices can be in both currencies but the conversion must be at the exchange rate which comes out of the market,” he said.
