Zimbabwe govt intervenes to end dual pricing

The government is closely monitoring businesses that are manipulating the exchange rate by using black market rates instead of the official ZiG currency rate. This practice undermines the ZiG, which is backed by gold, and is becoming increasingly common as some businesses limit the acceptance of ZiG or use dual pricing strategies.

Economists and officials have observed that businesses are distorting the market by bypassing the official interbank rate of 13.56. Notably, some large wholesalers have been using black market rates for local currency transactions.

Zimbabwe National Chamber of Commerce CEO, Christopher Mugaga, highlighted that such practices are affecting market stability, urging businesses to collaborate to address these issues. Economist Titus Mukove noted that the rapid adoption of the ZiG has led to destabilizing effects, stressing the need for ongoing monitoring.

Treasury is aware of the problem and is working on measures to address it without disrupting the ZiG's performance. Permanent Secretary in the Ministry of Finance, George Guvamatanga, assured that the ZiG should not be devalued due to its gold backing and foreign currency reserves.

Economist Persistence Gwanyanya suggested that to manage the increased use of ZiG and its related supply shocks, the central bank should inject more foreign currency into the market. The ZiG now accounts for nearly 40 percent of transactions, a significant rise from less than 5 percent five months ago, indicating the need for prompt measures to support currency stability.