Business Reporter
RESERVE Bank of Zimbabwe (RBZ) governor,Dr John Mushayavanhu has blamed the business community’s forward pricing tendency for exchange rate depreciation.
The observations come at a time when the exchange rates have depreciated to a high of US$1:ZWG25 on the parallel market, leaving traders with no choice except to adjust prices accordingly.
The rate of inflation in Zimbabwe closely tracks the parallel market rates which is often relied upon by the public as a true indicator.
“Precisely the , the higher parallel market rates are implied in the pricing structures of goods and services , as opposed to the actual trading of foreign currency in the alternative market , where the rates and trades have remained low since the introduction of the structured currency.
“As such ,the RBZ ,through the Financial Intelligence Unit will continue to deal with unjust forward pricing behaviour to minimise the inflationary pressures from speculation and greed , which fuels greedflation,” he said.
In his Mid-Term Monetary Policy Review Statement on Friday ,RBZ Governor Dr john Manushayavanhu said the central bank and Treasury were meeting weekly to assess the economy’s liquidity situation and implement corrective measures as needed.
The Liquidity Management Committee comprising the Finance Ministry and RBZ reconstituted to effectively manage the liquidity in the economy.The committee meets every week to assess levels of liquidity in the market and determine the necessary level of intervention by way of mopping up excess liquidity in the economy.
The central bank established the Monetary Policy Implementation ,Monitoring and Evaluation Committee (MPIMECO) that keeps track of the key indicators to promptly identify emerging risks and ensure timely response by the RBZ.
The MPIMECO developed a Governor’s Dashboard , which helps to provide early and daily warning signals on key monetary policy and financial sector sector developments and occasion appropriate and timely application of risk mitigation /management measures by the Central Bank.
