Zimbabwe’s central bank governor said on Tuesday the country would not impose new price controls, easing fears of deeper shortages of basic goods.
President Robert Mugabe’s government imposed a blanket freeze on prices of all goods and services in June in a desperate bid to contain the world’s highest inflation rate — now nearly 8 000% — but the move backfired as shop shelves were rapidly emptied through panic buying.
Although the controls have been gradually relaxed, most basic goods such as bread, milk, sugar and cooking oil are still in short supply and some supermarkets are selling imported products whose prices are beyond the reach of many.
Central bank Governor Gideon Gono, who has said the three-month price blitz was ”traumatising” the economy, told reporters after meeting the country’s business leaders that the government would not repeat its crackdown on prices.
”There is [a] need to allay fears born out of speculation that the country was heading back to the blitz as were seen some few weeks back,” he said.
Zimbabwe is in the grips of a severe economic crisis which critics blame on Mugabe’s policies, such as the seizure of white-owned farms to resettle landless black Zimbabweans.
Gono said the central bank had provided foreign currency amounting to $13-million and Z$10-trillion (about $333-million at the official exchange rate and $8,3-million on the black market) to businesses to help them recover from the impact of the price freeze.
”We do not have to go back to the three months of madness and as monetary authorities, we would like to state a few truths,” he said.
”We’re operating in a hyperinflationary environment, so we have to be open in whatever we do. Consumers cannot expect prices that were in existence in June and we urge our politicians to tell the truth that prices cannot remain the same forever.” – Reuters