… fuel price could sky rocket
By CHENGETO CHIDI
IN an unexpected move the Reserve Bank of Zimbabwe(RBZ) reintroduced the multi currency regime saying those with foreign currency could now use it to pay for goods and services less than a year following the reintroduction of the Zimdollar as the sole legal tender.
In a statement the RBZ said allowing people to pay using the free funds would reduce effects of COVID-19 on the economy.
“Government through the RBZ would like to advise the public that it is making it easier for the transacting public during this difficult period by making an option to pay using free funds for goods and services chargeable in local currency,” reads part of the statement.
Service providers will now be able to index their goods in USD and other currencies during the time of COVID 19.
RBZ Governor John Mangudya also dropped another bombshell saying government has dropped the floating exchange rate system in a bid to lessen the hardships brought about by corona virus.
Instead of floating the rate government has now fixed the rate of the ZWL against the USD at 1:25 at a time the official rate on the interbank market was 1:18.
“In it’s place the Bank has with immediate effect adopted a fixed exchange rate system at the current interbank level of $25 to the US. This measure will be reviewed when markets stabilise from the effects of COVID-19,” he said.
The latest move could trigger a fuel price increase where government has maintained prices at almost USD$1 equivalent, when the rate was around $18 on the interbank.
Former finance minister and MDC Vice President Tendai Biti said the move by the RBZ was an embarrassing admission that the local currency had failed.
“The regime has done a volte face and sneakily redollarrised. We told them it wouldn’t work and won’t work. They owe Zimbabwe an apology and they should now bring a Bill to parliament formally repealing those sections of the Finance Act that incorporated SI133 and 142 of 2019,” said Biti.