Zimbabwean retailers have started adjusting prices based on the country’s official exchange rate as the government implements measures to stabilize the economy. Wholesalers such as OK Zimbabwe and Pick ‘n Pay have led the way in recalibrating prices following the liberalization of the exchange rate.
The gap between the official rate and the black market rate has narrowed significantly in recent days. Customers have returned to supermarkets as exchange rate arbitrage opportunities from the premium have reduced. Price and currency stability appear to be returning quickly.
President Mnangagwa said the government will take “all measures necessary, including painful ones” to ensure price stability. Measures include liberalizing the exchange rate, limiting foreign currency auctions and directing all government entities to collect levies in local currency. The central bank also hiked interest rates.
Following the initial disruptions after the reforms, the economy appears to be stabilizing. Retailers are pricing goods based on the official rate. A loaf of bread costs $7,000 to $7,200, in line with the rate. Oil costs $26,375 (US$3.90) and cereal $28,510 (US$4.28).
While some items like meat remain overpriced, most goods now reflect closer to expected prices in US dollars. The government had condemned retailers for profiteering and price gouging as the Zimbabwe dollar plunged.
President Mnangagwa noted the high foreign exchange earnings yet instability, warning currency manipulators. The government’s stabilization measures now seem to be taking hold, bringing much needed relief to long-suffering Zimbabwean consumers.