Foreign currency illegal market fuels price hikes

Source: Foreign currency illegal market fuels price hikes | Herald (Business)

The Confederation of Zimbabwe Retailers has blamed the growth of the black market for foreign currency for fuelling the current wave of increases in prices of basic commodities.

The Confederation of Zimbabwe Retailers has blamed the growth of the black market for foreign currency for fuelling the current wave of increases in prices of basic  commodities.

Over the past few days, prices of most consumables have been sky-rocketing, leaving consumers in a lurch.

Confederation of Zimbabwe Retailers president Denford Mutashu said the  shortage of foreign currencies in the formal banking channels was  forcing most retailers and manufacturers to source from the black market  at a premium in order to continue importing goods.

“If manufactures and retailers are to remain in business and avoid  shortages, they have no choice but to seek money on the parallel  market and this comes at a premium and with it, inflationary pressure,” he said.

“While prices of local goods have gone up on average 15 percent,  imports have sky-rocketed due to the exchange rate pressures as the rand keeps sliding against the green-back. Remember South Africa is our major  trading partner and has become a bigger source market for raw  materials  and finished goods.

“The rand moved from an average $1,00 to R8,6 to the current R13,3. The fact that the bulk of the foreign currency is sourced from the black  market adds more confusion to the pricing situation in the country.”

Mutashu said the Government should promote use domesticate raw  materials building the capacity of local source suppliers like  agriculture as over reliance on imports was dangerous to an economy.

“The import component in production has pushed prices to the north.

“The parallel market has breached the 90 percent mark and manufacturers are  struggling to cope with the black market rate which has become the major source of foreign currency since it is a scarce commodity within the formal system. Government should compel all businesses and the public to  bank their cash,” he said.

He said there was need to curb corruption within and outside the  financial sector so as to restore confidence among the public to bank their cash again. — New Ziana.


  • comment-avatar
    Morty Smith 2 years ago

    You can educate a stupid person as much as you like they will still be stupid. Educated maybe, but stupid for sure. Mr Denford Mutashu seems to be a case in point. The black market is not the cause of the currency shortage or the deteriorating rate.

    The ZANU government and their insatiable lust to spend money they do not have is the cause. In other words the budget deficit is driving the rate. Has anybody seen all the brand new bond notes coming out of the banks lately?

    Who in their right mind would put real dollars into the bank when they will never be able to get them out again?

    The money dealers are performing a valuable service in enabling those in need to avail themselves of hard currency when they need it. This market is doing its job.

    Mr Denford Mutashu should shut up and stop embarrassing himself. How does a person of this calibre become president of anything? Does he think he is entitled to others peoples money even if they do not want to give it to him?