‘Zim has no price distortions’ - Zimbabwe Situation

‘Zim has no price distortions’

Source: ‘Zim has no price distortions’ – NewsDay Zimbabwe May 13, 2019

BY VENERANDA LANGA

GOVERNMENT has denied there is a three-tier pricing system with Industry and Commerce deputy minister RajeshKumar (Raj) Modi claiming the 2019 Monetary Policy Statement (MPS) by Reserve Bank of Zimbabwe governor John Mangudya completely solved the issue.

Modi was speaking in Parliament during a question-and-answer session last week.

Bulawayo East MP Ilos Nyoni (MDC Alliance) had asked Moji to explain the measures government was taking to resolve the three-tier pricing system currently prevailing in the market.

“Let me inform the House that the question on the three-tier pricing of commodities has been overtaken by events following the February 20, 2019 monetary statement by the Governor of the Reserve Bank of Zimbabwe, during which he introduced an exchange rate between the RTGS$ and the US$,” Modi said.

But Nyoni said the three-tier pricing system was still in effect, with different prices when one was buying using Ecocash, ZWL$ and US$, with a lot of distortions prevailing in the
interbank market as well as overpricing.

“Practically, what is prevailing in the market is different from what the minister is saying,” the legislator argue.

Prices of goods and commodities are being charged in either the United States dollar, ZWL$, which is virtual money, and in bond notes.

Modi, however, maintained that the three-tier pricing system was solved when the MPS was announced, adding that prices were now determined by the prevailing exchange rate.

Mbizo MP Settlement Chikwinya (MDC Alliance) insisted on that there is a price distortion arising from the fact that the exchange rate, as obtained at the bank, is not the same as
obtained even on the Old Mutual implied rate.

“This is what is making the three-tire pricing system continue. The question is: what policy measures are you putting in place to ensure that we eradicate the three-tier pricing system taking into cognisance the reality on the ground?” he said.

COMMENTS

WORDPRESS: 1
  • comment-avatar
    ace mukadota 4 months ago

    Talking prices :-

    Old Mutual Implied rate for the USD is 6.40 RTGS
    Blackmarket rate for USD is 4.95
    Blackmarket rate for Bond notes cash is 4.81
    Reserve Bank of Zimbabwe rate for USD is 3.34

    Nigeria has 5 different currency rates – reason why it is also a basket case in economics.

    Of course the RBOZ is a buyer of the USD at the price of 3.34 but sadly NOT a seller.

    The RBOZ and its predecessor the Reserve Bank of Rhodesia also had this idea of rigging the market in USD – since 1961 ZW has not had a free currency rate. The black market addresses that problem & the RBOZ refuses to accept that.

    So long as this rigging goes on prices will be chaotic in ZW comrades