Zimbabwe sets rules to have businesses use single exchange rate for pricing

Source: Zimbabwe sets rules to have businesses use single exchange rate for pricing | CGTN Africa

FILE PHOTO: A man counts bond notes at a vegetable market in Harare, Zimbabwe. REUTERS/Philimon Bulawayo/File Photo – RC14D0257440

Zimbabwe’s government on Friday announced new rules which will force businesses to resort to a single exchange rate in pricing goods and services or face fines for failure to comply with the rules.

The regulations are an attempt to control spiraling commodity prices amid the nation’s deteriorating economic crisis which has seen the country hit by runaway inflation (737 percent) and a spike fuel prices amidst a food shortage.

“Any person who provides goods or services in Zimbabwe shall display, quote or offer the price for such goods or services in both Zimbabwe dollar and foreign currency at the ruling exchange rate,” a gazette notice said.

The Zimbabwe dollar has lost value compared to the U.S. dollar with the exchange rate now at 72.14 per U.S. dollar. The loss in value came after the pegging of the currency at 25 was abandoned in June. Moreover, exchange rates in the parallel market in Zimbabwe are weaker.

The head of Zimbabwe’s central bank, John Mangudya, has previously accused some businesses of using parallel exchange rates of as much as 100 per U.S. dollar when pricing goods and services despite getting foreign exchange through the weekly auction.

Last month, President Emmerson Mnangagwa blamed Zimbabwe’s currency problems on political critics and greedy private sector players.

He said that the currency was under attack from businesses that were constantly raising prices and this was part of a wider political scheme against his government.

The government also suspended trading on the Zimbabwe Stock Exchange in an attempt to protect the Zimbabwe dollar, which has been in free fall in recent months.