Exchange rate slide hits consumers: CCZ
LIVINGSTONE MARUFU
The depreciation of the local currency against the greenback on the parallel market has led to soaring prices of goods and services in a country where many people are living below the poverty line, the Consumer Council of Zimbabwe has said
The local unit has lost 20% of its value in the past two weeks.
For most local businesses, the exchange rate in the parallel market has become the anchor of pricing of goods and services in the economy.
This has exerted pressure on consumers whose purchasing power has been eroded.
While the official exchange rate is pegged at ZWL$84.5: US$1, the rate in the parallel market is hovering around ZWL$130:US$1. A fortnight ago, the rate was hovering around ZWL$110:US$1.
The plunge means many products have become inaccessible to many as the prices have gone beyond the reach of many.
“We are anticipating some significant changes in prices of food stuffs and other services by the end of May due to a significant movement of the exchange rate on the parallel market. As we speak some goods and services have spiked following these movements,” CCZ acting executive director Rosemary Mpofu told Business Times.
She said the basket remained flat in March and April.
Zimbabwe’s cost of living as measured by the CCZ’s low income urban earner monthly basket for a family of six marginally increased to ZWL$35 879.72 at the end of April 2021 from ZWL$35 703.41 in March.
The food basket increased to ZWL$15 303.88 by the end of April 2021 from ZWL$15 082.71.
The price of detergents decreased to ZWL$1031.54 in April 2021 from ZWL$1076 in March 2021.
“The increase in the total figure of the basket is attributed to the price adjustments, especially on the basic food items, due to inflation, influence of the exchange rate and in exceptional cases the parallel market,” CCZ said.
CCZ said the further relaxation of the lockdown regulations has resulted in an increased movement of consumers, activities of the market place and change of consumer behaviour patterns emanating from the eroding of consumer buying power.
