Finance and Economic Development Deputy Minister Clemence Chiduwa has acknowledged the spike in inflation and unbridled price increases, saying this is being driven by the exchange rate.
Chiduwa said the exchange rate can be stabilised through increased exports, while at the same time, the government’s policy interventions would increase confidence in the Zimbabwe dollar. He said:
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The inflation rate at the moment is the exchange rate driven. So, what is needed on our part is to stabilise the exchange rate.
In terms of the stability of the exchange rate, the medium-to-long term is for us to produce. The stability of the exchange rate is on us being in a position to export.
But in the short-term, the movement in the exchange rate at the moment is due to a number of factors. One such factor is speculation and operations of the parallel market.
This is where we are now saying we want to bring some stability and formality in the trading of currency.
A survey carried out by the Chronicle on Monday revealed that some shop workers in Bulawayo were busy removing old shelf prices replacing them with new pegs, a development reminiscent of the 2008 hyperinflationary period.
Meanwhile, as of yesterday, the US dollar was trading at $42 from $40 last week on electronic transfers on the parallel market while it was at $39 on the official market.