Economists have projected that prices of commodities will soon start falling down in response to the ban on the use of all foreign currencies for domestic transactions.
The introduction of Statutory Instrument 14 of 2019 has so far resulted in the local currency gaining value against the US dollar on the parallel market. The parallel market exchange rates were trading as high as US$1: ZW$15 before the SI. They instantly fell to the current levels of US$1: ZW$7.
Analysts believe that since the rates were being used by the business community to peg their prices, the sudden change will trigger a fall of the prices.
An economic analyst, Mr Kipson Gundani explained:
Subsequent exchange control measures have also been put in place to guarantee liquidity of the interbank market, hence there are high rationale expectations that prices of goods and services will soon be going down in alignment with the exchange rate trends.
Confederation of Zimbabwe Retailers (CZI) President, Mr Denford Mutashu said that they were working to make sure that the prices align with new realities on the market. Mutashu said:
As an association, we are doing all we can for prices to reflect their cost structure without prejudicing consumers.
Meanwhile, some shops have been hiking their prices in response to the introduction of the SI. Analysts have described the move as pure sabotage.
Other retailers, according to a recent snap survey by the Sunday Mail, have dramatically lowered their prices in response to the SI.
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