By Alois Vinga
ZIMBABWE’S business leaders see prices of most basic commodities soon going back to where they were almost a week ago after foreign currency black market rates soared this past week but tumbled almost immediately.
The much sought after US dollar hit an all-time high of over 500 percent but fell to just over 100 percent.
This means if one had a hundred US dollars, they walked away with $500 in terms of the local currency but this came to a halt when black market traders started paying only $200 for US$100.
In an interview, Zimbabwe National Chamber of Commerce chief executive and economist, Chris Mugaga predicted a fall in prices which shot through the roof in the past one week.
“The whole confusion triggered by the early October monetary policy announcements has come to a dead end,” Mugaga said.
“To a larger extent, the rates and prices were driven by panic and this time around, the message that speculative buying will only burn your hands has reached the ears of the country’s nationals as prices will soon follow suit,” he said.
Confederation of Zimbabwe Industries president, Sifelani Jabangwe concurred.
“What is now holding back most retail outlets is just a wait and see approach but definitely, we foresee price adjustments and they will definitely go back to where they were before because that is the actual position being predicted by market rates,” he said.
Economist, Godfrey Kanyenze said that many factors contributed to the forex rate slump but maintained that ultimately, business will be forced to revise down their prices.
“The exposure of cash barons on social media platforms has forced illegal dealers to hibernate as they now fear the application of legal justice against them because the risk is now too high as government remains under pressure to act.
“Naturally, the developments could also be a matter of the economy self-correcting itself,” he said.
Confederation of Zimbabwe Retailers president, Denford Mutashu also predicted a price fall.
“Other things being constant, it should lead to drastic reduction of goods,” Mutashu said.
“The only challenge is that it is driven by speculation arising from the government’s announcement that it has acquired more than US$1 billion from Afreximbank to guarantee the RTGS/bond note exchange rate to the US$ at 1:1,” Mutashu said.
He added that the other reason for the decline is resentment after the public and business noticed that they were actually losing instead of gaining from the parallel market transactions.
“No sane business or human being should buy forex at 800 percent, that is madness hence this market should be decimated like yesterday,” he said.